Banking giant Citigroup is close to selling about $12 billion (£6.09 billion) of leveraged loans and bonds to a group of private-equity firms including Apollo, Blackstone and TPG.

The sale is said to be at an average price slightly below 90 cents on the dollar and could be unveiled when Citi reports first-quarter results on Friday next week. None of the parties would comment.

Citi, badly hit by the subprime mortgage crisis, is heavily exposed to leveraged loans, which totalled about $43 billion at the end of last year.

It is understood the bank may be looking to sell more of the loans.

While the sale would crystallise losses, it would also protect the bank from further declines in the value of the debt and tallies with new chief executive Vikram Pandit's strategy of shedding high-risk holdings.

Citigroup, in common with many of the big banks, has been caught in the credit squeeze on the loans it issued to help finance leveraged buyouts. Investors' demand for the debt has dried up, leaving lenders with the debt on their books, often at below face value.

Last month, Oppenheimer & Co analyst Meredith Whitney estimated that 10 major investment banks, including Citigroup, had about $197 billion of leveraged lending exposure although the industry's has dropped since the start of the credit crunch last summer.

Pandit is ready to dispose of more than $200 billion of Citi assets. He has been reducing exposure to leveraged loans and high-yield bonds since taking over from Chuck Prince, who fell on his sword in December.

Just two weeks ago, Citigroup led the sale of $1.45 billion of bonds that Apollo and TPG used to finance their $17.1 billion purchase of casino operator Harrah's Entertainment. Those bonds were priced at 84 cents on the dollar.