Wells Fargo & Co. denied Thursday that it had yielded to labor pressure when it dropped its lead-arranger role for a $125 million credit line to Oregon Steel Mills Inc.
The AFL-CIO said it was reducing its role in leading the credit facility because of a loss of deposits and union pension business. The union is involved in a 19-month strike against Oregon Steel's Pueblo, Colo., plant, and it is boycotting banks that do business with the company.
"We don't feel we have a place between a company and a union," said Kathleen Shilkret, a spokeswoman for Wells Fargo. "We can't refuse to do business with one party because another party asks us to. It would set a dangerous precedent."
Instead, Wells Fargo is continuing to provide credit to Oregon Steel, which is leading its own financing, Ms. Shilkret said. Oregon Steel's credit line, which was led by Wells Fargo's predecessor bank, First Interstate, matured June 11.