Bank of America sells debts in Foxtons

Loans made by Bank of America Merrill Lynch to London estate agency Foxtons have been sold on to Haymarket Financial LLP, reportedly at less than 90 pence in the pound.

The US lender is also selling £20m of Foxton’s debt to BC Partners.

BC Partners is the private equity firm which bought Foxtons for £360m at the height of the housing market in 2007, but then saw its investment turn sour.

Last year, it had to go back to the banks which backed its spectacularly ill-timed purchase and ask for a debt-for-equity deal.

The result was that Bank of America and Japan’s Mizuho Financial Group became majority owners of Foxtons. Last year, Foxtons had losses of £900,000.

However, in the latest twist to the saga, BC Partners said Foxtons was back in profit to the tune of £16.7m for the first half of this year and was planning to open 20 new offices as part of a major expansion, and that it wanted to buy back some of the debt.

Bank of America is said to be retaining shares in Foxtons, whilst Mizuho is retaining its share of the debt. It is believed that BC Partners has also been negotiating with Mizuho to buy back some of its debt.

Haymarket Financial was set up in 2009 with backing from Towerbrook Capital Partners, and has offices in London and Luxembourg. It describes itself as a “patient long-term lender”.