Bank of America, Barclays Capital and Deutsche Bank cut all trading lines, including derivatives, with Westdeutsche Landesbank late last month in an attempt to force it to agree to a debt refinancing. The lines were reopened within three days--the Deutsche Bank line was restored March 29, and lines with BofA and Barclays were reinstated over the next two days--the morning after the refinancing closed, says one banker. He noted the lead agents' move meant that WestLB was unable to trade any products with the firms.
The move was a last-ditch attempt to get WestLB to sign up to Reliant Resources' USD5.9 billion make-or-break debt refinancing. Mark Cohen and Chris Kinney, managing directors at Deutsche Bank and Barclays responsible for the refinancing, and Peter Sherman, a financier at BofA who worked on the deal, declined to comment. John Ryan, managing director in WestLB's New York workout team, said "The lead arrangers seemed to over-react to the situation." He declined to discuss details of the spat.