The Work

January 25, 2012 3:20 PM

Linklaters Among Six Firms Advising HSBC on Sale of Latin America Unit

Posted by Brian Baxter

UPDATE: 1/26/12, 11:50 a.m. The names of the Hughes Hubbard & Reed lawyers advising Banco Davivienda have been added to the 14th paragraph of this story.

As part of its continuing effort to shed assets, London-based global banking giant HSBC Holdings announced this week that it has agreed to sell its Latin American businesses to Colombia's Banco Davivienda for $801 million.

Banco Davivienda will pick up 136 bank branches in Costa Rica, El Salvador, and Honduras in the deal, which will increase the acquiror's size by roughly 20 percent. Bloomberg reports that about $4.3 billion in assets and $2.5 billion in loans will also change hands in the transaction.

Linklaters and five firms Central and South American firms are representing HSBC on the sale. The company has been busy in recent months spinning off certain operations in a bid to cut expenses and raise cash in anticipation of increased costs in emerging markets and tighter capital rules in Europe.

The Banco Davivienda deal comes about a month after HSBC tapped Norton Rose to serve as outside counsel on the sale of the company's Japanese private banking unit to Credit Suisse. In August, Sullivan & Cromwell advised HSBC on the $2.6 billion sale of its credit card business to Capital One Financial and $1 billion sale of 195 branches in Connecticut and upstate New York to First Niagara Financial.

London-based Linklaters corporate partner Aedamar Comiskey is advising HSBC on U.K. legal issues related to its latest divestiture. The Magic Circle firm is one of several top British firms HSBC has traditionally relied on for its outside legal needs.

Arias & Muñoz, one of Central America's largest law firms, is providing counsel to HSBC on legal issues in Costa Rica and El Salvador through founding partners José Antonio Muñoz and Francisco Armando Arias. Arias & Muñoz partners Daniel Araya in San José and Roberta Gallardo in San Salvador are also advising HSBC.

Rene López Rodezno, founding partner of Honduran firm López Rodezno & Asociados in Tegucigalpa, is also representing HSBC along with banking practice head Jorge López Loewenberg.

São Paulo-based corporate partners Eduardo Avila de Castro and Renato Gomes Ribeiro Maggio from leading Brazilian firm Machado, Meyer, Sendacz e Opice are counseling HSBC on legal issues in that country, which boasts one of the the world’s fastest-growing economies.

Teofilo Berdeja Prieto, a founding partner of Mexico City–based Berdeja, is advising HSBC in Mexico. And in Panama, HSBC has turned to business law partner Inocencio Galindo of Panama City-based Morgan & Morgan for corporate and regulatory advice.

HSBC also announced Wednesday the sale of its consumer banking and wealth management business in Thailand to the Bangkok-based Bank of Ayudhya Public Company for $115 million. Norton Rose is advising HSBC on that deal, according to U.K. publication Legal Week.

Richard Bennett serves as HSBC's group managing director and general counsel out of London, where he oversees an in-house legal department of more than 700 lawyers in 50 countries. This year will mark the end of a 33-year run at HSBC for the 59-year-old Bennett, who is set to retire and move into a part-time consulting role for the bank.

Earlier this month, the transition into new in-house legal leadership moved into high gear, as HSBC hired Stuart Levey as its new chief legal officer. Levey, who served as undersecretary for terrorism and financial intelligence at the U.S. Department of the Treasury from July 2004 until February 2011, has been a senior fellow for national security and financial integrity at the Council on Foreign Relations in Washington, D.C., since leaving his government post.

Before shifting to the public sector, Levey spent 11 years as a litigator in private practice at Washington’s Miller, Cassidy, Larroca & Lewin, which merged with Baker Botts in 2000. His hiring comes at a time when HSBC is under fire from the Senate over its anti–money laundering practices.

Hughes Hubbard & Reed corporate partners Amy Dulin in Miami and Michael Weinsier in New York are advising Banco Davivienda, which was founded in 1972. In the past, the Bogotá-based bank has also used many of the top firms in Colombia that handle banking and finance work for corporate clients.

Most of the assets being sold to Banco Davivienda were acquired by HSBC in 2006 through its $1.7 billion buy of Grupo Banistmo, which was at one time was Central America's largest bank. Cleary Gottlieb Steen & Hamilton advised HSBC on that deal.

Cleary represented HSBC again this week, this time in connection with the company's decision to walk away from a proposed $62.5 million settlement with feeder fund investors in Bernard Madoff's massive Ponzi scheme, according to sibling publication The Am Law Litigation Daily.

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