According to Moody's Investors Service Inc, Wells Fargo's credit profile took a hit for itsparticipation in the financing of the HJ Heinz Co purchase. This is due to the risk of the lender as it moves into investment banking.
Wells Fargo, which is in the process of expanding its securities unit, would offer larger loans in order to land profitable advisory fees. This was clearly exemplified in the Heinz deal according to analysts at Moody's. Many clients require debt financing options before allowing banks to be signed on as advisors in a deal.
Wells Fargo, together with JPMorgan Chase and Co had entered into an agreement with Berskshire Hathaway and 3G Capital to finance the US$14.1 billion sale. While the two banks also served as financial advisors, the largest shareholder in Wells Fargo is Berkshire Hathaway.
As a result of the sale, Wells Fargo shares fell by nearly three percent, closing at US$34.79 per share.dy's Investors Service Inc, Wells Fargo's credit profile took a hit for itsparticipation in the financing of the HJ Heinz Co purchase. This is due to the risk of the lender as it moves into investment banking.
Wells Fargo, which is in the process of expanding its securities unit, would offer larger loans in order to land profitable advisory fees. This was clearly exemplified in the Heinz deal according to analysts at Moody's. Many clients require debt financing options before allowing banks to be signed on as advisors in a deal.
Wells Fargo, together with JPMorgan Chase and Co had entered into an agreement with Berskshire Hathaway and 3G Capital to finance the US$14.1 billion sale. While the two banks also served as financial advisors, the largest shareholder in Wells Fargo is Berkshire Hathaway.
As a result of the sale, Wells Fargo shares fell by nearly three percent, closing at US$34.79 per share.
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