Blackstone, the private equity group, is advising its rival Terra Firma on a plan to issue high-yield bonds to repay Citigroup’s £2.6bn of loans to music group EMI, one of the US bank’s biggest single exposures.

The buoyant high-yield bond market could be an escape route for companies bought by private equity during the debt bubble that are facing concerns on how to repay about $600bn (£366bn) of loans maturing over the next five years.