(Full story) (FT first broke the news BNP was selling the book; we were first to name Wells Fargo, which eventually won, as a bidder)
By Lionel Laurent
PARIS, Jan 27 (Reuters) - BNP Paribas, France's largest listed bank, is aiming to sell up to $11 billion of loans to oil and gas companies and has received interest from Canadian buyers, according to two banking sources familiar with the situation.
The sale is the latest sign of retreat by European banks, which have faced months of funding turmoil as a result of the euro zone debt crisis and are pushing to offload dollar assets to shrink their balance sheets and build precious capital.
The cutbacks are putting pressure on dollar-focused industries such as energy, shipping and aerospace. Indonesian tanker firm Berlian Laju is teetering on the brink of default, while Swiss refiner Petroplus filed for bankruptcy on Tuesday.
BNP Paribas, which according to one banker opened its energy loan-book up to potential buyers just over a month ago, has whetted the appetite of several banks in North America, particularly Canada, according to sources.
"The $11 billion figure was cited ... There is certainly Canadian interest," one banker familiar with the deal said. "Our feeling is that it is inevitably going to be broken down into chunks."
Another source said that in addition to Canadian buyers, BNP had received interest from U.S. banks including Wells Fargo and had been getting offers with a discount of less than 5 percent of the value of the loan.
"The cost of funding is killing BNP's margins so they want to get out," the source said. The portfolio contains long-term loans to energy companies that do not have the cash flow to fund their own exploration or production activities, he added.
By Lionel Laurent
PARIS, Jan 27 (Reuters) - BNP Paribas, France's largest listed bank, is aiming to sell up to $11 billion of loans to oil and gas companies and has received interest from Canadian buyers, according to two banking sources familiar with the situation.
The sale is the latest sign of retreat by European banks, which have faced months of funding turmoil as a result of the euro zone debt crisis and are pushing to offload dollar assets to shrink their balance sheets and build precious capital.
The cutbacks are putting pressure on dollar-focused industries such as energy, shipping and aerospace. Indonesian tanker firm Berlian Laju is teetering on the brink of default, while Swiss refiner Petroplus filed for bankruptcy on Tuesday.
BNP Paribas, which according to one banker opened its energy loan-book up to potential buyers just over a month ago, has whetted the appetite of several banks in North America, particularly Canada, according to sources.
"The $11 billion figure was cited ... There is certainly Canadian interest," one banker familiar with the deal said. "Our feeling is that it is inevitably going to be broken down into chunks."
Another source said that in addition to Canadian buyers, BNP had received interest from U.S. banks including Wells Fargo and had been getting offers with a discount of less than 5 percent of the value of the loan.
"The cost of funding is killing BNP's margins so they want to get out," the source said. The portfolio contains long-term loans to energy companies that do not have the cash flow to fund their own exploration or production activities, he added.
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