The Royal Bank of Scotland has entered the U.S. asset-level financing scene, with its purchase of Shell Capital's producer-finance portfolio. The seasoned lender to the North Sea oil and gas sector had generally limited its North American activity to investment-grade facilities. The new Houston-based structured oil and gas finance team at RBS is looking for deals to bolster its $250-million portfolio, which includes the acquired producer-finance portfolio and several existing volumetric production-payment financings. The ultimate goal-some three to four years out-is to grow the group's total business to $1 billion. About 50% of the deals would be senior debt, 25% structured finance and 25% mezzanine, says Jim McBride, managing director and head of structured oil and gas finance for RBS in North America. "We plan to be patient in building our business," McBride says. "With current market conditions, we can be selective about the deals we take." McBride's career includes stints at Fleet, Enron, Bank of America, Chase Securities (now JPMorgan) and Mobil. He is joined in Houston by Phillip Ballard, who has worked for Enron, Unocal, CNG and Exxon. Also in the group are an RBS structured-finance veteran, Adam Pettifer, and Craig Fox as engineering manager, formerly with Enron. Other recent staffing additions include Bobby Poirrier from TD Securities; Kevin Adam from Duke Capital Partners; Mike Mantis from Goldman Sachs; and David Elmer from ABN Amro. There is one more management slot to fill. The team has already provided three new commitments worth a total of about $100 million: a project-finance pipeline deal, and two E&P deals-one senior debt and one subordinated debt. The group can underwrite sizeable transactions. However, its preferred hold levels are $25- to $50 million for senior debt deals, $50- to $75 million for structured-finance deals and $15- to $25 million for mezzanine projects. -Jodi Wetuski
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