Renewable Energy Group (REG), one of the largest biodiesel producers in the U.S., had a problem. It needed to secure working capital financing for its marketing and distribution division without hampering the ability of its investment and construction divisions to continue to make acquisitions and to engage in construction. To find the custom financing structure that met REG’s unique needs, Pillsbury’s energy finance lawyers tapped into their experience working with banks and other providers of credit to determine what a creditor would require to sign off on a business-unit-level credit facility. With this in mind, the Pillsbury team devised a meticulous process of ring-fencing that created a clear carve-out of the marketing and distribution business—packaged to meet the stringent requirements of potential lenders. The result: REG entered into the U.S. biodiesel industry’s first working capital lines of credit not secured by the parent’s biodiesel plant assets and the investment division was free to move on its next strategic acquisition.

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