Hunton & Williams lawyers on Jan. 15 helped Spanish client Banco de Sabadell close on its more than $142 million purchase of Mellon United National Bank, the Miami outpost of Bank of New York Mellon Corp.
David R. Yates, the Atlanta associate who served as second-in-command on the deal team, which was led by Hunton Miami partner Fernando C. Alonso, said an exact value has not been released on the all-stock deal because the price turned in part on the value of the Mellon deposits.
“Because the deposits increased, the purchase price ended up increasing as well,” he said. Because Sabadell had to file with the Bank of Spain, that country’s equivalent of the Federal Reserve Bank here, he added, “the final amount is still not entirely public.”
The transaction, first announced in July, included the acquisition of Mellon United’s $1.68 billion in deposits and 60 percent of its loans, which amounted to $875 million. Mellon United on Wednesday changed its name to Sabadell United Bank N.A.
Bank of New York Mellon’s most recent 8-K, filed with the Securities and Exchange Commission on Wednesday, indicates that at least some of the 40 percent of the loans that Sabadell did not purchase may have been real estate loans retained by the seller. Bank of New York Mellon in the fourth quarter of 2009 “recorded an after-tax loss of $119 million largely related to additional write-downs primarily for retained South Florida real estate loans,” the SEC filing says in a paragraph discussing the bank’s discontinuance of operations at Mellon United National Bank.
Yates said that most of the loans his client purchased were commercial mortgages, with “very, very few residential mortgages” thrown into the mix. As to why Sabadell did not buy the entire loan portfolio, Yates would say only, “It was a phenomenal deal that was negotiated by Sabadell, and in this current environment with all the regulatory scrutiny, that’s what the parties really believed was necessary and was in the best interest of the target bank in order to make it a very, very attractive transaction to Sabadell.”
This is Sabadell’s third major purchase of a U.S. bank. Sabadell purchased Miami-based TransAtlantic Bank in 2007, followed by Spanish bank BBVA’s private banking business in Florida in 2008. Hunton lawyers also worked on the latter of those deals. Together, the acquisitions bring Sabadell’s total business volume in the United States to approximately $6.4 billion—$4.3 billion in managed assets and $2.1 billion in loans.
Yates said that he spent most of the week prior to closing in a conference room overlooking Biscayne Bay, finalizing documentation and going through a signing round with Sabadell executives.
“Given that there were certain loans that were being transferred, assigned out or participated out of the target bank, there was a lot of dialogue and exchange on that,” he said. But, he added, “in general, both sides were well-prepared. They’d been communicating regularly between signing and closing.”
He added that he and the other lawyers and executives on the deal celebrated over churrasco, a specially cooked steak, at an Argentine restaurant in Miami.
Sabadell’s internal legal team was led in the U.S. by Anna Oestereicher, its U.S. general counsel, and in Spain by the bank’s general counsel, Oriol de Nadal Alier. Bank of New York Mellon was represented by in-house counsel, led by Marcia Wallace and Becket Sorce.