The Birmingham office of Barclays Commercial Bank has defied the banking gloom by announcing the completion of the first stage of its largest contract.
The regional branch said it successfully closed a £200 million medium-term loan facility deal for the Co-operative Group.
The loan is the first part of a multi-billion pound finance package for the group to buy high-street supermarket rival Somerfield.
It is backed by a portfolio of 163 commercial properties owned by Somerfield, which are currently let to more than 300 people.
The deal is believed to be the largest ever handled by the Birmingham office of Barclays, and takes place as banks around the world are being hit by an ability to give out credit.
Jason Constable, the regional head of structured property finance for Barclays Commercial Bank in Birmingham, said the completion of the deal was particularly satisfying, given the stifling effects of the credit crunch on so much of the financial sector.
And he said the ability of the Midlands property finance team at Barclays to set up a package in a relatively short time “reaffirms its position as a leading real estate finance team in the region which is definitely open for business”.
Mr Constable added: “To get this deal across the line in the current climate is absolutely fantastic, particularly when you dread to open the papers every morning and see what’s in the news.
“This transaction further confirms our ability to deliver on complex and sizeable real estate financings in the Midlands despite current economic market conditions.
“The sheer volume of properties and tenants included within the deal presented its own challenges.
“However, we were able to reach financial closure, within a short timeframe, on plan. We are thrilled to be playing a key role in the Somerfield acquisition financing for the Co-operative Group.”
The property portfolio loan agreement is the first part of a £2.35 billion funding package being set up for the Co-op in a joint deal between Barclays, Lloyds TSB Corporate Markets and The Royal Bank of Scotland. The deal, costing the Co-op more than £1.5 billion, will see the group take over about 880 Somerfield stores in the UK.
All the Barclays aspects of the deal are being headed by the bank’s Birmingham branch on Colmore Row.
Martyn Wates, chief financial officer for the Co-operative Group, said: “I am delighted with this innovative financing package arranged by Barclays which enables us to diversify our sources of funding and optimise the acquisition financing package arranged for the Somerfield acquisition.”
Barclays is now waiting to start work on the rest of the funding package, pending approval of the deal by the OFT.