Goldman Sachs has been forced to give investors the largest discount yet offered by an investment bank in the credit crunch in an attempt to offload loans linked to a highly leveraged buyout, The Times has learnt.

Goldman Sachs and Dresdner Kleinwort agreed to back Bain Capital’s €1.4 billion (£1.1 billion) buyout of Bavaria Yachtbau GmbH, one of Europe’s largest yachtmakers, last June. A month after the deal closed, the credit crunch took hold and the banks were forced to sit on €900 million worth of Bain’s debt as investor appetite for leveraged deals dried up.

Now Goldman Sachs has agreed to sell €100 million of the senior debt at 65 cents in the euro. The bank, which declined to comment, has been marketing the deal and took investors, mainly hedge funds, to meet the group’s management in a bid to persuade them to buy the debt. Sources said that there were doubts about the health of the yacht manufacturer as some of its customers - bankers and hedge fund managers - have been hit by the credit crunch.

It is understood that Goldman Sachs will sit on its €350 million share of the remaining debt. Dresdner Kleinwort is believed to have decided to sit on its share of the debt for longer.

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The discount is an example of what banks are prepared to do to shift high-risk leveraged loans off their balance sheets. “They’re prepared to crystallise losses just to get this stuff off their books,” one banker with knowledge of the deal said. This week, Citigroup agreed to sell a heavily discounted $12 billion (£6 billion) package of leveraged loans to a group of private equity buyers. To persuade them to buy the loans at 90 cents in the dollar, Citigroup lent the buyers about two thirds of the price in new loans.

Goldman Sachs has been one of the few banks that has managed to steer clear of the full onslaught of the credit crisis. One trader said: “This is clearly the deal that Goldman is most worried about.”

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