Europe is in for a rise in leveraged buyout restructurings as lenders sell their bad loans to "distress investors" that are interested in taking over the borrowers, according to Financial Times.

In the surging "loan-to-own" deals, hedge fund or private equity investors acquire existing bank loans at steep discounts to their face value. The investors then work to take over the firms by swapping debt for equity, the report explained.

US distress investors such as Oaktree and New York's Apollo Management have raised capital and beefed up their European groups after the financial crisis. According to private equity investors, many of the banks have now recapitalized and are looking to accelerate the disposal of their assets, the report stated.

In the past two years, American investors have also been noticeably visible in Europe. This is partly due to their belief that there are better deals there than in the US, where prices have increased so much, the report detailed.

According to data from consulting firm PwC, European banks have sold loans with a combined face value of  €60 billion this year. This is an increase from €46 billion in 2012 and €36 billion in 2011. The PwC estimates that the volume of loan sales will climb up to €80bn in 2014, thanks to the asset stress tests and quality review planned by the European Central Bank, Financial Times reported.