The Work

February 22, 2012 1:55 PM

Skadden, S&C Advise as Wells Fargo Acquires $9.5 Billion BNP Paribas Loan Portfolio

Posted by Ross Todd

Skadden, Arps, Slate, Meagher & Flom and Sullivan & Cromwell have landed lead outside counsel roles on a deal announced Tuesday under which BNP Paribas Corporate and Investment Banking will sell its so-called reserve-based lending business in the United States and Canada to Wells Fargo & Company.

While terms were not disclosed, the BNP press release announcing the deal said the Houston-based energy business changing hands in the transaction encompasses about 175 customer relationships, some $9.5 billion in loan commitments, and roughly $3.9 billion in outstanding loans as of the end of 2011.

About 90 percent of the loans included in the portfolio originated in the U.S.; the rest originated primarily in Canada, according to Well Fargo's press release announcing the deal. The transaction is set to close in the second quarter of this year pending regulatory approval.

BNP Paribas turned Skadden, Arps, Slate, Meagher & Flom as its outside counsel on the transaction. The firm's team includes financial institutions partner David Ingles, energy and infrastructure partner David Armstrong, derivatives partner John Osborn, tax partner Steven Matays, and executive compensation and benefits partner Neil Leff. All are based in New York, with the exception of Toronto-based Armstrong.

Wells Fargo, meanwhile, tapped Sullivan & Cromwell to advise on the transaction. The firm's team is led by New York M&A partner Stephen Kotran and Washington, D.C., corporate partner Dennis Sullivan.

The sale is part of BNP Paribas's global plan to deleverage its balance sheet and reduce its U.S. dollar funding requirements, according to the BNP press release. As Forbes noted Tuesday, as other European banks have made similar moves to deleverage amid the eurozone debt crisis, Wells Fargo has been a ready buyer.

Last year, for instance, the San Francisco–based banking giant announced that it would acquire more than $3 billion in U.S. commercial real estate loans from Irish Bank Resolution Corp. and more than $1 billion of loans from the Bank of Ireland. As The Am Law Daily reported in December, lawyers from Ashurst represented Wells Fargo in the Bank of Ireland transaction.

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