Finance review

Review of the year

All things taken into consideration, it’s been a pretty good year for most finance practices. A steady stream of high-profile debt financings for major corporate transactions at the start of the year have given way to refinancings and restructurings, in particular since the events of 11 September.

Allen & Overy (A&O) and Clifford Chance sit unchallenged as the market leaders, but it would be fair to say that Linklaters has made some serious inroads into the market, pulling ahead of the likes of Norton Rose and Ashurst Morris Crisp.

Linklaters has made a sizeable dent in the syndicated loan market and has been involved in some of the biggest finance deals this year. In May, it advised South African mining company De Beers on debt financing when it was bought out by a consortium in what has turned out to be the largest ever non-US public to private transaction. Then in June it advised the banks which financed Gallaher Group’s £1.1bn acquisition of a 41 per cent stake in the state-owned Austria Tabak.

A&O and Clifford Chance had better watch out – the banks are ready for a bit more choice. An increasing number of bankers recognise Linklaters’ status as a global player, which puts the firm nicely in the comfort zone.

In the European medium-term note (MTN) programmes, the top three firms are virtually indistinguishable. In fact there’s something a bit smug about A&O, Linklaters and Clifford Chance when they talk about MTN programmes. German firm Hengeler Müller Weitzel Wirtz is the only firm making an effective challenge to their pre-eminence, albeit only in German law. It is noteworthy that the firm is managing to dominate the German MTN market, which is all but under lock and key elsewhere in Europe.

Norton Rose deserves a mention, particularly its acquisition finance practice, which has consolidated relationships with HSBC, the Royal Bank of Scotland (RBS), Deutsche Bank and JP Morgan Chase. Prominent deals include advising Chase on its g250m (£154.89m) debt packaging for Gerresheimer Glas and advising RBS on buyouts of Ward Homes and Powell Duffryn.

In terms of lateral moves, the biggest news to hit the headlines was the departure of Erica Handling’s collateral debt obligation practice, which was wooed away from Weil Gotshal & Manges by Ashursts. Some have said that Ashursts is an odd choice for the Weil Gotshal trio, but the move is consistent with the Ashursts strategy to build a strong debt finance practice and the practice is certainly pulling in the work.

The impact of the Brown & Wood merger with Sidley & Austin was sizeable and the legal world saw the creation of a structured finance force to be reckoned with. At the beginning, both practices may have been a bit unsure of what exactly they were linking hands with, but to the outside world it certainly looks like a match made in heaven.

Freshfields Bruckhaus Deringer has focused on niche areas of finance, such as securitisation, vendor financing and real estate financing. There are still no signs of a reconciliation with Citibank, but partners at Freshfields claim a new relationship is finding its feet.

The in-house team at Standard Chartered Bank, led by Kate Nealon, won The Lawyer’s In-house Banking & Finance Team of the Year award for its $1.34bn (£928.48bn) acquisition of Grindlays Bank. Halifax was in second place and Barclays Capital in third.

A&O won The Lawyer’s Finance Team of the Year award for its telecoms financing. It advised on deals worth more than k10bn (£6.2bn) in 2000 alone, including advising the arrangers of the k100m (£61.96m) debut financing for Virgin Mobile.

So although there have not been any dramatic changes in the ranking tables, there has been enough movement and change to keep firms on their toes. The gaps between the top tier and the second and third tiers are beginning to close, as the lagging firms penetrate the markets they specialise in. You can rest assured there is no room for anyone to get complacent.