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PNC-BBVA deal doles out league table credit to advisers

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PNC-BBVA deal doles out league table credit to advisers

The PNC Financial Services Group Inc. and BBVA USA Bancshares Inc. deal offers plenty of league table credit for the investment banks that worked on the transaction.

Five i-banks landed financial advisory roles, with four — BofA Securities Inc., Citigroup Global Markets Inc., Evercore Inc. and PNC FIG Advisory Inc. — advising PNC and J.P. Morgan Securities PLC advising Banco Bilbao Vizcaya Argentaria SA. The $11.57 billion deal will catapult those firms near the top of the U.S. bank and thrift deal value league table, as the industry's next-largest deal of 2020 is the $2.26 billion merger of equals between CenterState Bank Corp. and South State Corp.

For BofA, it is the first U.S. bank M&A assignment since Gary Howe joined the firm in late 2019 as a co-head of the Americas financial institutions group. In the past, Howe has worked on similar transactions involving the sale of a banking business based outside of the seller's headquartered country. At his previous firm Lazard Ltd., Howe advised Netherlands-based Rabobank on the $1.53 billion sale of U.S.-based banking business Rabobank NA to Mechanics Bank in 2019. He also advised the buy side on Bank of Nova Scotia unit Scotiabank Chile SA's $2.20 billion acquisition of Banco Bilbao Vizcaya Argentaria Chile SA in a deal that closed in 2018.

Other BofA advisers on the deal were Jerry Wiant, who worked with Howe at Lazard before rejoining him earlier in 2020, and Brian Ascher, who has been with the company since 2005, according to Financial Industry Regulatory Authority records. Ascher also advised PNC on its $3.47 billion acquisition of RBC Bank (USA) in 2012.

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Evercore has a recent deal history with PNC. During a July conference call, Evercore co-Chairman and co-CEO John Weinberg noted that the investment bank advised the bank on its BlackRock Inc. stake sale that helped give PNC the dry powder to make the all-cash bid for BBVA USA Bancshares. The BlackRock equity sale, which Weinberg said became Evercore's "largest ever active book run transaction," came together pretty quickly for the i-bank.

"It literally was two weeks from the time that we received the first call until the transaction was priced," co-Chairman and co-CEO Ralph Schlosstein said, according to a transcript.

Schlosstein's connection with PNC goes back much further. He, Larry Fink and others founded BlackRock in 1988, and Schlosstein was president of the company when it sold to PNC in 1995. PNC exited its remaining investment with the stock sale.

Evercore also has a banking relationship with PNC. In October, the i-bank extended to 2022 a credit facility with PNC that was established in 2016, according to an SEC filing.

Evercore recently saw the departure of Jane Gladstone, who had led the company's financial services corporate advisory business. Gladstone is now the president of IntraFi Network LLC, which was previously called Promontory Interfinancial Network. Tannon Krumpelman, who joined Evercore in 2017, leads coverage for banks and specialty finance in the Americas, and he helped bring depository M&A assignments to the firm. However, the PNC-BBVA deal will mark Evercore's largest U.S. bank M&A assignment, according to S&P Global Market Intelligence data.

Another bookrunner on PNC's BlackRock stake sale was Citigroup. The spot on the PNC-BBVA deal will mark Citigroup's largest financial advisory assignment on a U.S. bank deal since landing a role on the 2006 sale of North Fork Bancorp. Inc. to Capital One Financial Corp., which had a closing price of $13.30 billion.

J.P. Morgan is no stranger to large U.S. bank deals. On U.S. bank M&A transactions with a value of at least $1 billion announced since 2010, J.P. Morgan Securities LLC has landed 18 deals and generated deal credit of $68.51 billion when including assignments from its international and New York-based subsidiaries. That total deal credit is 31.3% higher than the total from Goldman Sachs & Co. LLC, the No. 2 i-bank on the list.

On the PNC-BBVA deal, J.P. Morgan's advisers include Fernando Rivas and Scott Albinson, who are based in the U.S., and Carlos Pertejo, who is based in Spain. Earlier in his career, Pertejo left J.P. Morgan to work at BBVA. He then went back to J.P. Morgan after working at Goldman Sachs Group Inc.

While J.P. Morgan Securities has a history of big bank deals, the PNC-BBVA deal will also allow for a new name to enter the billion-dollar-bank deal club in PNC Capital Markets LLC. PNC expanded its depository investment banking wherewithal with the 2019 acquisition of Ambassador Financial Group Inc., which is now part of PNC FIG Advisory.

While this role is advising its parent, it should help PNC's i-bank secure a high ranking in the 2020 bank and thrift deal value league table.