Citigroup is nearing a deal to sell $12bn in leveraged loans at a discount to a group of leading private equity firms, marking another step in new chief executive Vikram Pandit’s efforts to shrink the beleaguered bank’s balance sheet.

Although details of the deal were still being worked out, people familiar with the matter said Apollo Management, the Blackstone Group and TPG would buy the loan portfolio at a discount that could come in at about 90 cents on the dollar.