Lehman Brothers Holdings Inc. may shift about $32 billion of commercial mortgages and real estate to a new company that would be spun off in a move similar to the good-bank/bad-bank model used in the 1980s banking crisis, two people briefed on the discussions said.
The bad bank, nicknamed Spinco for now, would have about $8 billion of equity coming from Lehman, the people said, speaking on condition of anonymity because the plan is one of several under consideration. Spinco would borrow the remaining $24 billion from Lehman or outside investors. The New York bank would replace capital put into Spinco, whose shares would be owned by current Lehman shareholders.
Lehman is under pressure to strip its balance sheet of hard-to-sell assets. To raise cash needed to cope with losses from a wholesale disposal, it has been talking with Korea Development Bank about a capital infusion and with private-equity firms interested in buying its asset management unit.
The Spinco proposal would enable Lehman to dispose of 80% of its commercial mortgages, the people said. Under another plan, the firm would establish a company capitalized and managed by outside investors to buy some of its mortgage assets.
Lehman declined to comment.