Houston Energy Partner Mike Blankenship Addresses Reserve-Based Loans

The prolonged oil slump is accelerating the efforts of many commercial banks to sell off the loans they have made to oil and gas drillers. Once a staple of oil and gas lending, banks are now offloading reserved-based loans (RBL) as a measure to avoid getting entangled in the increasing number of oil and gas bankruptcies.

Still, Winston & Strawn energy finance partner Mike Blankenship cautions that there will not necessarily be a deep pool of such buyers for RBL portfolios and the market could get saturated quickly.

He adds that the ability for banks to find buyers for their RBL portfolios will come down to the value of those underlying oil and gas reserves.

Read more of Mike's commentary in the Law360 article “Banks Eye Energy Loan Sell-Off Amid Oil Downturn.” (subscription required.)