Dewey predicts further law firm bond offerings after its own $125m issue

The full extent of bond offerings issued by law firms is likely to be higher than expected, according to Dewey & LeBoeuf partner Richard Shutran.

The firm recently raised $125m (£81.89m) in a bond offering to refinance its existing bank debt.

Shutran, chair of the firm’s global finance group and a member of its executive committee, said the bonds were investment grade and had been purchased by insurance companies. 

Although some reports have labelled the bond offering an unusual move for a law firm, Shutran said that, because of the private nature of the deals, there was little way of knowing just how many firms had sold bonds.

“I think the majority of law firms have some amount of borrowings and more often than not from commercial banks,” the told The Lawyer.

“At some point they need to be repaid and we had to make a decision as to how to refinance or extend them.

“It became clear that investment grade lending, particularly by insurance firms, was pretty vibrant, and long-term interest rates were at a historic low, and we made a decision to lock in interest rates for the long term.”

Asked whether other firms would follow suit, he replied: “The real is answer is that I don’t know. These are private placements and not public transactions.

“There’s generally no place or publication where they appear, so we’re not aware how many other firms have done them, or to what extent”

Shutran said that his previous firm, Dewey legacy firm Dewey Ballantine, issued a similar bond offering in 1990.

Other firms reported to have done the same include Clifford Chance in 2003 and Morrison Foerster in 2001 and 2002.

Shutran continued: “The benefits are that we can link in our borrowings and fix interest rates on good terms, and we don’t have to keep going back to banks to deal with short-term debt.

“It shows that investors have confidence in the legal market, and particularly in ours,” he added.

“Those in the investment grade market have meticulous standards and have enough confidence in our strength that they’re willing to invest for 10 years.”