Freshfields Bruckhaus Deringer and Hengeler Mueller advised on a transaction in which chemicals giant BASF AG received a €3 billion ($3.2 billion) line of credit.

At a time when the global economic outlook is bleak due to the impact of the COVID-19 pandemic, a number of European companies, including Airbus and Adidas, have sought to shore up their liquidity by adding additional lines of credit.

Freshfields advised BASF and Hengeler advised a consortium of six international banks, the firms said.

European companies have found that obtaining lines of credit is not so easy in the coronavirus era, as U.S. banks have pulled back from lending to European companies. The Financial Times reported recently that JPMorgan recently pulled out of talks over an additional credit line for BASF, and Bank of America lent half as much as the other six international banks that underwrote a €3bn state-backed loan to sportswear giant Adidas.

In late April, BASF said it could not provide accurate sales and earnings expectations for the full year. The German company, which is the world's largest chemicals group, added that it "expects to be severely impacted by the economic consequences of the global weakness in demand and drop in production, in particular as a result of the ongoing production stoppages in the automotive industry."

The line of credit will run for a year and is seen as a liquidity buffer, the firm said in a statement

Freshfields' advice covered all aspects of the agreement and conclusion of the credit line. The Freshfields team was led by partner Mario Hüther.

The Hengeler team was led by partner Johannes Tieves.

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