City raises Wembley loan doubts

WestLB's commitment to its £757m loan to rebuild Wembley stadium was back in the spotlight after yesterday's upheaval at the bank.

Wembley was one of the high profile deals clinched by Robin Saunders after the English national stadium team spent a tortuous two years searching for financing in the City.

With her departure from the German bank now thought to be days away, the City has begun to raise concerns about the status of the crucial loan.

Although WestLB has off-loaded some of its exposure to a syndicate of rival banks, it is believed to be still carrying more risk in the stadium project than it had intended.

Wembley National Stadium Limited (WNSL), the Football Association subsidiary running the building project, is expected to draw down the loan in the coming days - just as the bank is likely to reach a decision about the future of Ms Saunders' principal finance unit.

But WestLB was adamant last night that the loan was not in doubt. Although the deal was won by Ms Saunders, it was not being financed by her principal finance unit, the bank said.

"The Wembley financing was a project financing. It is not a principal deal and [we do not have] any equity. It is not part of this [principal finance] portfolio," a WestLB spokesman said.

WNSL said: "Wembley Stadium's finances are secure and we enjoy a good relationship with our bankers". The building of the 90,000-seat stadium was on track, it added, and it would open in 2006.

Other deals WestLB has not yet signed have already been affected by the tension between the head office in Düsseldorf and the London principal finance unit.

WestLB pulled its financing from the Bream vehicle, which had been bidding for Anglia Water's owner, AWG, and an attempt to refinance whisky maker Kyndal is thought to have stalled.