Wells Fargo says it has agreed to buy WestLB's subscription finance portfolio, which provides letters of credit (L/Cs) and other facilities to specialist investment funds.

The portfolio contains about US$6 billion in commitments, of which approximately US$3 billion is outstanding.

Investment funds

Financial terms for the US bank's acquisition of the portfolio from one of Europe's best-known banks were not disclosed.

In addition to L/Cs, subscription finance provides committed revolving and term loans, most often to private equity and real estate investment funds.

Client opportunities

Wells Fargo says that the acquisition enhances its position in the marketplace. The bank says its new subscription finance clients include some of the industry's strongest fund managers.

In addition to continuing to provide subscription finance services to the clients it inherits from West LB, Wells Fargo also aims to provide them with other banking services.

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