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The Finnish market saw a number of large banking transactions, either domestically from regional banks to local companies, or as part of large European or regional deals with Finnish involvement. Among the large financings were a €550 million loan to Sponda, a €700 million revolving loan for Stora Enso and a €500 million revolving facility to Metso....

The Finnish market saw a number of large banking transactions, either domestically from regional banks to local companies, or as part of large European or regional deals with Finnish involvement.

Among the large financings were a €550 million loan to Sponda, a €700 million revolving loan for Stora Enso and a €500 million revolving facility to Metso. A number of large deals were handled by the leading local firms, such as the €1 billion of financing for Pandox's acquisition of the Norgani Hotels chain and a €2 billion debt-for-equity transaction as part of the Europe-wide restructuring of European Directories Group.

The real estate sector was also relatively active as was the mining sector, with players such as the Talvivaara Mining Company which needed €320 million in project financing for a new nickel mine.

"There was some lack of international financing a couple of years back, but they are back and you do see them on the syndicates, but not quite in the number that there were before," says one partner. "Looking at the market it has stabilised since last autumn and pricing has increased substantially, corporates are back in the market and banks are competing on the deals with an increased interest in leveraged deals. Banks are quite hungry and interested in doing deals; start of 2011 was more active than 2010," says another.

There has, on the other hand, been quite a few refinancings and restructurings, more than were expected for some partners and there are still market jitters. "The market is very touchy," says a lawyer, "sometimes deals move on, sometimes they come to a halt, sometimes they are suspended for six months... very unpredictable. Everyone is super cautious on the lender and borrower side, people go cold very easily".

The Finnish capital markets, say some local practitioners, are not in a great state. The reason for this opinion is largely based on the quiet equity markets....

The Finnish capital markets, say some local practitioners, are not in a great state. The reason for this opinion is largely based on the quiet equity markets.

Although the country has seen some rights issues, most notably Cramo's €100 million rights issue which was announced in March 2011 and a series of mid-value issues, the capital markets have by and large been very quiet especially since the second half of 2010. "In my opinion markets are not so active, I give regular advice to managers of companies, but there have been no rights issue, or very few, and no IPOs," says one lawyer.

The simple reason, says another, is that "IPOs are not offering companies any benefit after the cost burden of structuring and corporate issues". Others explain that Finnish companies are either showing good balance sheets and good cash flows and have no need to raise capital, or are waiting on bank lending. There have been some listings on foreign exchanges, for example Ruuki Group's IPO on the LSE, but nothing locally.

The debt side has been a bit busier, with a number of bond issues and some activity on more sophisticated issuance such as hybrids, convertibles and covered bonds. A number of banks launched MTN programmes and completed issuances under them. One notable deal was Talvivaara Mining Company's €225 million convertible bond issue.

There is also some hope that Sweden's First North exchange for small - medium sized companies may come to Finland, and partners point to public M&A deals in the pipeline, increased activity in private equity and a growing interest in IPOs.

However, says a partner: "There is actually a lot of concern about the future of the Finnish capital markets, and whether everything will be centralising in Stockholm, especially now with the overhaul of the capital markets legislation pending." The partner adds: "The sad thing is that the market hasn't developed, it is actually a national problem. We are part of a group trying to reform the securities law and one of the tasks is to boost the capital markets: the capital market is not functioning as it should and the stock exchange is studying why this is the case."

A new Securities Markets Act is currently on the table with some quite significant proposed amendments especially relating to rules on how shares can be held (in a multi-tier ownership structure other than just direct ownership), otherwise called beneficial ownership, to bring legislation to par with the EU and decrease transactions costs. The amendments will not be in place until 2012 or 2013.

The picture in the M&A market has been quite positive, especially at the mid-market level. The 2008 Companies Act has had a good effect on business and government subsidies for hi-tech start-ups has also been driving small to medium sized transactions....

The picture in the M&A market has been quite positive, especially at the mid-market level. The 2008 Companies Act has had a good effect on business and government subsidies for hi-tech start-ups has also been driving small to medium sized transactions.

On the big ticket side of things, partners tend to agree that things are looking as normal as they could be. Public M&As have been quiet but private M&As across a variety of industries have been good, though often related to divestments from distressed parties.

One of the largest straight forward M&As in 2010-11 was DNA's acquisition of Wellho from the Sanoma Group for €200 million. Renesas Electronics acquired Nokia's wireless modem business for $200 million, Royal Dutch Shell Nordic sold its refining and marketing divisions to St1 Group / Keele for $640 million and UPM-Kymmene Corporation acquired Myllykoski Group and Rhein Papier for €900 million.

Private equity also had a good run of transactions at the €100 million mark.

Looking ahead, some partners highlight healthcare as a potentially busy sector. "There will be quite big activity with healthcare segmenting in to different businesses. The demand is there and expectation deep, but you can't finance it with more taxes, you have to include private sector, and at the moment private only does 5% of the provision."