10:07, June 28 405 0

2017-06-28 10:07:10
US firm joins magic circle on £700m rescue of Co-op Bank

Paul Hastings has joined magic circle firms acting on the £700m rescue deal for the troubled Co-op Bank.

The bail-out could well be the largest UK restructure this year, with the bank this morning announcing a £700m recapitalisation and funding commitment from a group of US hedge funds.

Clifford Chance was called in to advise the bank at the start of this year, as the Co-op announced it was looking to sell the asset. The recent deal, although not the desired sale, will nevertheless secure the bank’s future and enable to exist as a stand-alone entity.

The magic circle firm’s team was led by partner Lee Coney. He was supported by head of restructuring Philip Hertz, capital markets partners Simon Sinclair and Iain Hunter, and corporate partners James Bole and Hilary Evenett.

Partner Clare Hoxey handled pensions law aspects, while partners Simon Gleeson and David Harkness worked on regulatory and tax matters respectively.

The funds – Golden Tree Asset Management, Silver Point Capital, Cyrus Asset Management, BlueMountain and Anchorage Capital – meanwhile turned to Paul Hastings restructuring partners David Ereira and Karl Clowry, as well as senior associate Matthew Poxon.

Additional support came from London managing partner Ronan O’Sullivan, and partners Peter Schwarz and Arun Birla.

The entire magic circle also won roles on the transaction, with Allen & Overy continuing to advise longstanding client the Co-operative Group. Partner Mark Sterling took the lead from the firm, alongside banking partners Stephen Matthews and Melissa Samuel, and corporate partner Dana Burstow.

Linklaters worked with the Co-operative pension scheme to ensure that a safe future was ensured for members. The firm’s deal team was led by pensions partner Ruth Goldman, who was supported by counsel Dominique Hurst and managing associate Gareth Craft.

Freshfields Bruckhaus Deringer is understood to have won the mandate for the Bank of England Prudential Regulation Authority – a role that would become more prevalent should the BoE decide to put the Co-op Bank back into resolution.

Most deals of this kind rely on two parties – borrowers and lenders – although this deal is notable for its four-party representation from both the regulators and pensions trustees.

The US hedge funds will begin by raising £250m in the first stage of the commitment deal.