DEAL OF THE WEEK: Barclays Capital and Deutsche Bank

Allen & Overy's (A&O) Frankfurt office has just acted on three major syndicated loan transactions totalling x10bn (£6.11bn).
Most recently, the office advised Barclays Capital, Deutsche Bank AG, and Deutsche Bank Luxembourg as mandated bank arrangers in relation to a two-tranche x2.6bn (£1.59bn) multi-currency revolving credit facility for Ruhrgas.
The instruction came directly to Frankfurt, where banking partner Neil Weiand led the team with Heather McCallum. Partners Yorck Jetter and Andreas Koenig from Freshfields Bruckhaus Deringer advised Ruhrgas.
Weiand said: "Barclays has become more and more active in the German market. It's seeking more and more advice directly from Frankfurt at the moment."
Barclays' presence on the deal is illustrative of the increasing success of the entry by foreign banks into the German loans market.
German corporates started tapping into the loan market relatively early, but whereas historically German banks were guaranteed a free run, the market has now become more contested on fee pricing. German corporates are considering non-German banks in prominent roles, and A&O's Frankfurt office is benefiting from the shift.
"What we're seeing currently is the German banking sector restructuring, expanding and trying to hold its old fortifications, but foreign banks are entering the market successfully," said Weiand.
Prior to the Ruhrgas deal, Weiand acted for mandated lead arrangers Bank of America Securities, Deutsche Bank and JP Morgan on a c6bn (£3.67bn) syndicated euro-dollar revolving credit facility for Bayer, in relation to the acquisition of Aventis CropScience. Hengeler Mueller acted for Bayer.
This instruction came to Frankfurt from London. "A&O was suggested by Deutsche Bank. Bank of America was happy to go along with that," said Weiand. In Germany, Deutsche Bank frequently works with Hengeler, but the German firm was already selected by Bayer.
Non-German banks were also prominent in a third A&O transaction before Christmas. A&O advised HSBC Investment Bank and JP Morgan as mandated bank arrangers on a c1.5bn (£917.25m) syndicated multi-currency revolving credit facility for Metro and Metro Finance. The instruction came on the back of a recommendation by the borrower. Weiand had previously worked on two loans for Metro when he was in-house at Deutsche Bank. Metro was advised in-house on this latest facility.
Weiand said: "These are three of the most significant recent transactions in the German market and they clearly demonstrate that the loan markets continue to be accessible to corporates, despite the general slowing down of the economy.
"From our perspective, it shows that we have quite a good market penetration. There aren't many other deals being reported at the moment. If you look at the development of the Frankfurt office, the Allen & Overy name was surely helpful, but over the years we've built quite a strong finance practice. The market is acknowledging that."