Wells Fargo acquires BNP Paribas reserve-based energy lending business

By Marisa Wong

Madison, Wis., Feb. 21 - Wells Fargo Bank will acquire BNP Paribas' North American reserve-based and related diversified energy lending business, according to a news release.

The BNP Paribas energy lending business consists of $9.5 billion of loan commitments, including $3.9 billion of loans outstanding as of Dec. 31.

About 90% of the portfolio is U.S.-based, with the remainder located primarily in Canada.

BNP Paribas said that the sale is part of its global plan to deleverage its balance sheet and reduce its U.S. dollar funding requirements. The transaction will further strengthen the company's financial profile and is expected to improve its common equity tier 1 ratio by 5 basis points.

"Though it was a difficult decision, we are pleased to have secured a premium on the sale of the business," said Everett Schenk, BNP Paribas' chief executive officer of North America, in a news release.

The premium that Wells Fargo paid for the energy lending business and other specific terms of the transaction are not being disclosed.

"The initial closing of the transaction, which will include transfer of a significant portion of the loan portfolio, will take place in the second quarter of 2012. Any remaining loan transfers will happen as borrower consents are received. BNP Paribas and Wells Fargo are committed to working in a coordinated manner in order to make the transition as timely and efficient as possible for the borrowers," said Dan Cozine, head of Structured Finance Americas at BNP Paribas.

"The acquisition of this established and well-managed business is a unique opportunity for Wells Fargo to continue to grow its industry-leading energy banking business," said Mike Johnson, head of Wells Fargo's corporate banking group.

Upon closing of the acquisition, all BNP Paribas employees who have been part of the energy business being acquired will be given an opportunity to join Wells Fargo.

Wells Fargo is a financial services company based in San Francisco. BNP Paribas is a Paris-based financial company.

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