City firms advise as ICG acquires leveraged loan portfolio from RBS

Clifford Chance (CC) and Ashurst have won lead roles on Intermediate Capital Group's (ICG) €1.4bn (£902m) acquisition of a large leveraged loan portfolio from the Royal Bank of Scotland (RBS).

Ashurst advised private equity debt manager ICG on the deal, which is thought to be the first-ever acquisition of a leveraged loan portfolio from a bank without vendor financing.

The City firm fielded a team led by New York structured finance partner Michael Smith, who worked alongside London securities partner David Quirolo. Tax partner Paul Miller advised on tax aspects of the transaction, while loan due diligence was carried out by international finance partner Fraser Wood.

RBS, which was for many years one of the largest lenders to private equity in Europe until it pulled out of leveraged loans last year, was advised by CC, which fielded a team led by capital markets partner Rachel Kelly.

The magic circle law firm's team also included tax partner Chris Davies, derivatives partner Claude Brown and Amsterdam capital markets partner Frank Graaf.

Kelly commented: "We have not seen arbitrage CLOs around for a while now and this deal shows that there is life in that market, which has been the subject of speculation for some time. From a legal perspective, putting together the structure was interesting, especially against the backdrop of the current economic climate, new and greater regulation and tougher rating agency criteria. This is also one of the first transactions to use the New Safekeeping Structure (NSS) for registered notes, which was introduced in June 2010."

It is understood the sale equates to about one tenth of RBS' leveraged loan book, which is classified as non-core assets. According to its first-half results for 2010, the bank's leveraged loan portfolio stood at £11.9bn at the end of June.