banks Discount LBO debt up to 10% to clear backlog

--Citigroup Inc., Goldman Sachs GroupInc., Morgan Stanley and JPMorgan Chase & Co. are offering discounts of as much as 10 cents on the dollar to clear a $231billion backlog of high-yield bonds and loans. -- While lenders reduced the overhang by 32 percent since July, they are struggling to unload debt from this year's record $438 billion of leveraged buyouts after losses from securities linked to subprime mortgages reduced demand for higher-yielding assets, according to data compiled by Bloomberg. They sold some bonds ata discount of 10 percent to face value and loans at 5 percentbelow par, according to London-based Barclays Plc. --LBOs declined to $101.9 billion in the second half from$336.4 billion in the first six months as the subprime marketcollapsed. --Banks have $161.9 billion of loans and $69.6 billion ofbonds left to distribute, according to JPMorgan data.