Bloomberg reported that Citigroup Inc. is in discussions to sell $12 billion of loans at a loss to Apollo Management LP, Blackstone Group LP and TPG Inc. as part of an effort to improve the bank’s balance sheet, a person briefed on the matter said.

A sale to the private equity firms would help protect the bank from further declines in the value of the debt, said the person, who asked not to be identified because negotiations are private. The loans are part of the $43 billion in financing that Citigroup agreed to provide for leveraged buyouts last year before credit markets tightened and left the New York-based company with hard-to-sell assets.

Citigroup’s stock price has dropped 19 percent in New York trading this year, partly on concern that write-downs of leveraged loans, which currently trade at about 90 cents on the dollar, might add to $24 billion of losses the bank has taken so far on mortgages and bonds that tumbled in value. CEO Vikram Pandit is shedding high-risk holdings to open up capital.

The company’s so-called Tier 1 capital, the core measure of solvency demanded by regulators, fell to 7.1 percent as of Dec. 31, down from 8.6 percent a year earlier. A “well-capitalized” bank must have a ratio of Tier 1 capital to assets of at least 6 percent, according to rules set by industry regulators. Citigroup had about $2.2 trillion of assets at the end of 2007, more than any other U.S. bank.