At least 11 firms are seeking more than $12 billion as banks court buyers for more than $370 billion of debt they pledged to finance takeovers. Investment groups such as Los Angeles-based Oaktree Capital, which oversees $47 billion, and BlackRock in New York see a chance to profit because banks are stuck with loans they made before demand for below-investment-grade debt dried up in the past three months. Funds managed by Goldman and Lehman, both based in New York, may end up buying loans their firms made, and KKR may invest in debt used to finance its own LBOs, the people said. New York-based Citigroup and a group of investment banks sold $1 billion of loans for automotive-supplier Allison Transmission at 96 cents on the dollar on Sept. Investors said other firms opening funds include Boston- based Sankaty Advisors LLC, a fixed-income affiliate of private- equity firm Bain Capital LLC, which raised more than $1 billion; Lake Forest, Illinois-based Z Capital Partners LLC, which gathered $500 million; Ore Hill Partners LLC in New York, which brought in $450 million; and Arx Investment Management LP, a New York-based hedge-fund manager. read more