Pepper Homeloans is buying a $109 million portfolio of prime, but highly leveraged, home loans from Merrill Lynch, the AFR Dealbook column reported. First Permanent, formerly owned by home building company Devine, originated the loans in the mid 2000s. Most of the loans were to buyers of house and land packages from Devine. The lender ceased writing new loans in early 2008.The lender was willing to provide loans with a loan to valuation ratio of up to 106 per cent and loan terms of up to 50 years.The loan book has a current loan to valuation ratio of 92 per cent, Dealbook reported.Meanwhile Pepper on Monday announced some details of its management buy out. Pepper Group (Singapore) Pte Limited, a special purpose holding company, is the new owner.In addition to local management the new owners include "an investor group consisting of institutional and high-net worth investors" according to a media release.