IFLR 1000
The Guide to the World's Leading Financial Law Firms

The government's firm of choice, Arthur Cox retains its position in the top tier after another successful year in which it has finalised a number of substantial and complex mandates on behalf of the state and several troubled Irish Banks, which were imperative in stabilising the country's economy.

One private client, who was aware of the firm's crisis-driven activities, said it had not let this detract from its level of service: "They're incredibly busy because Arthur Cox is playing a very significant part in the financial crisis in Ireland, but they always make time to get in touch with you and if you ask them to do something they respond very quickly."

The firm's debt and securitisation team, which is headed by partner Cormac Kissane has, predominantly, been restructuring deals and working on non-transactional issues relating to the banking crisis for the Department of Finance and credit institutions.

The National Treasury Management Agency and the Department of Finance mandated Kissane on two separate substantial asset transfers for nationalised banks carried out after an order under the Credit Institutions Stabilisation Act (CISA). One was from Anglo Irish Bank to Allied Irish and the other was between Irish Nationwide Building Society and Irish Life Permanent. Combined, the volume of the transactions exceeded €14 billion at the time of closing.

In notable new work, the firm advised EBS Building Society on a €750 million residential mortgage securitisation by an Irish SPV Mespil 1 RMBS, which was originated by EBS and Haven Mortgages. JPMorgan was the lead arranger and Kissane headed the team acting as transactional counsel on the deal. In international work, partner Glenn Butt was active for Bank of America, advising on the issue of a $964 million CLO of Danish Bank Credits. The transaction was finalised in February 2011.

On the debt side, Kissane headed a team advising the EBS Group on repurchasing its non-core Tier 1 capital instruments, which had been repackaged into bonds issued by SPVs (special purpose vehicles) that consequently had to be acquired too. The firm repeated this transaction for EBS in early 2011. The two transactions increased the bank's core Tier 1 capital by €131.9 million. Another deal saw Butt lead a team acting for Russian gas producer Novatek on the issuance of a dual tranche $1.25 billion loan participation notes in July 2010.

The majority of the equity work driven out of Ireland in the last 12 months has been for the government or banks and the firm has been involved in the majority of it. Two teams from the firm advised a group of Irish State bodies and Bank of Ireland on the latter's multi-feature €3.5 billion capital raising, which was collectively the largest undertaken in Irish corporate history. A team led by managing partner Pádraig Ó Ríordáin – who has extensive experience advising the government on crisis-related work, notably on the establishment of the National Assessment Management Agency (Nama) – and Maura McLaughlin acted for the government while partners Eugene McCague and Brian O'Gorman acted for the bank. The transaction involved several separate tranches: a placing of €1.5 billion with institutional shareholders; a €1 billion placing with the National Pensions Reserve Funds Commission (NPRFC); a rights issue to raise up to €1.9 billion; debt for equity swaps; and the cancellation of warrants held by the NPRFC in return for a payment of €500 million. As a result, the Irish State holds approximately 36% of the ordinary stock in Bank of Ireland, approximately €1.78 billion of preference shares when the deal closed in June.

An extremely time-sensitive deal saw the firm advising another bank in turmoil. On December 23 2010, a court order was obtained under the recently implemented CISA stating that Allied Irish (AIB) must meet the newly-stipulated capital requirements by the years end. On the same day Maura McLaughlin led a team advising AIB on an issuance of mixture of ordinary and convertible non-voting shares, in addition to a payment of €52.5 million to the NPRFC, which resulted in an overall €3.9 billion recapitalisation and an adherence to the court's order.

The firm also acted on the behalf of both EBS and Irish Nationwide Building Society in the lenders recapitalisations which totalled €775 million and €2.6 billion, respectively.

A mark of a firm's quality can be seen in the calibre of its clients and Arthur Cox has long been the preferred council of the Government. Challenging times for the country has meant an abundance of complicated mandates for the firm which, when allied with a wealth of positive references from clients and competitors, secures the firm's premier placing.

"Cox's have a very good corporate banking practise," observes one competitor, who cites practice head Grainne Hennessy as an impressive figure among the firm's banking partners. In a deal of extreme magnitude, Hennessy acted for the state in negotiating the terms of €44 billion in funding from the EU, the European Financial Stability Facility, the UK, Sweden and Denmark, which was extended to the country in December 2010.

Headline deals are common for the firm, and the loans extended to property developer Bernard McNamara, some of the first to be assumed by Nama (National Asset Management Agency), required some significant restructuring with the assistance of the firm. Partners Kevin Lynch, Brendan Cooney and Shane Fraher advised Ulster Bank Ireland on the deal, which involved the enforcement of security, in January 2011.

The firm prides itself on being one of the Irish firms that has cross-border capabilities and partners Kathleen Garrett and Ruth Lonergan acted for the Guernsey based Northern Trust which signed off on a $250 million multicurrency revolving credit to Stenham Asset Management in October 2010.

Regulatory advice has become integral to Irish corporations in the last 12 months. The firm's financial services regulatory department is headed by partners Orla O'Connor and Robert Cain. The latter has advised both Postbank and Bank of Scotland Ireland on winding down operations in Ireland and assisted the capital markets team in advising the Department of Finance and the Nama on restructuring the country's banking sector. Cain is consistently praised by clients as pragmatic and responsive: "He has got a very commercial approach, he knows a lot about method; he was at the FSA on secondment, so he has got a good grounding in European legislation so he's very good to work with," says one.

Clients value the practice as a whole for its excellent level of service: "I really think they're good, incredibly approachable, always responsive, very commercial and pragmatic. I really like working with them," one says

The second tier is regarded as a fair ranking for Arthur Cox by the market. The firm may not advise as many funds as those in tier one and some who share its ranking, or have as many dedicated funds partners but the practice has secured some innovative mandates and the partners within the group boast other accolades that speak to the high level of competency they offer. Practice head Kevin Murphy is a member of the Irish Funds Industry Association's legal and regulatory committee and the legislative sub-committee of The Taoiseach's (Irish Prime Minister) funds group; and, partner Dara Harrington, who was made up in 2010, is part of the panel for the Alternative Investment Committee.

In a precedent setting deal, Murphy advised on the first re-domiciliation of a Bermudan unit trust to Ireland as a Ucit (undertakings for collective investment in transferable securities). Another unique deal saw, Murphy act for the Brazilian Banco Citibank on establishing Citi Latin America Region Funds as a Ucits fund. It was the first time the Central Bank of Ireland allowed a Ucit to invest up to 100% of its assets in Brazilian sovereign debt.

A new trend in the Ucits space is the establishment of so-called Newcits by hedge fund managers and the Harrington has been active in this capacity, establishing a Newcit, an onshore Ucits III compliant fund, for investor Grantham, Mayo, Van Otterloo & Co (GMO) called GMO Global Real Return Fund.

A substantial fund merger, which attests to the continuing popularity of Ireland as the domicile of choice for its international funds offerings, saw Legg Mason join its Luxembourg Ucits into Irish fund Legg Mason Global Funds involving assets in excess of €1 billion.

Arthur Cox retains its place in the top tier alongside A&L Goodbody as peers and clients struggle to separate the two firms in terms of quality and experience. "Very good. They are quite different in style and approach to A&L Goodbody but they are both excellent firms, it just comes down to the personalities you want on the deal [when deciding which firm to use]," explains one client, adding: "I enjoy working with them, they are always pleasant people to deal with and highly experienced."

The firm, as one of the preferred advisers to the government, has secured mandates in regard to the stabilising of the banks. "Arthur Cox are doing very well state side on the financial crisis work," says one peer. One of these deals saw managing partner Pádraig Ó Ríordáin and McLaughlin advise Nama (National Asset Management Agency) on the transfer of €15.8 billion of deposits and assets from Irish Nationwide Building Society to Irish Life & Permanent and from Anglo Irish Bank to Allied Irish in a deal which closed in February 2011.

But distressed mandates have not completely occupied the firm's corporate department in that last 12 months and it has advised on some interesting public deals. Brian O'Gorman led a team advising Irish food company the Greencore Group, on the local law of its merger with Northern Foods and the formation of Essenta Foods. This was the first time that the European cross-border mergers regime was used in a public takeover in Ireland or the UK.

Managing partner of the firm Ó Ríordáin is a director of Paddy Power and the firm count the betting agents among its long-standing clients. Maura McLaughlin advised Paddy Power on the acquisition of the remaining shares in Sportsbet, the listed Australia online bookmaker, for an initial €100.9 million, with possible additional consideration of €49.5 million. Paddy Power already owns the remaining 49%.

Another notable deal saw Partners Ciarán Bolger and Conor O'Dwyer advise CapVest on its merger with Origin Enterprises to establish Valeo Foods Group, in which CapVest retained a majority shareholding, in November 2010.

Widely recognised as the most active firm on the market, Arthur Cox is recognised for its excellent relationships in both the public and private sector and has completed a strong portfolio of PPP (public-private partnership) and renewable energy projects in a challenging 12 months for the country's project finance lawyers.

The practice is led by Alex McLean, an energy specialist, who is regarded as an expert in his field: "He does energy and energy regulatory work and he does it very well," says one peer. Partner Garrett Monaghan is also commended by peers who see him as an industrious lawyer with a broad range of capabilities: "Garrett covers an awful lot of bases and does an awful lot of deals," says one lawyer.

Social infrastructure has fared better than most areas during the financial crisis in Ireland and a deal highlight for the firm came when it achieved financial close for the Schools Bundle Two PPP, which comprised five schools on four sites for almost 5000 pupils, in June 2010. Aaron Boyle and Jenny Fisher advised the National Development Finance Agency on the €100 million project which was co-funded by Bank of Ireland and NIBC Bank with the European Investment Bank. It was the only PPP in Ireland to go into and survive a default thanks to the novel structure in place and the first to attract European Investment Bank funding in Ireland since 2007.

On the renewable energy side, the team closed two wind farm deals recently. Monaghan advised Ulster Bank Ireland on providing the debt facilities for an offshore wind farm in the UK for Mainstream Renewable Group, which was finalised in January 2011. Practice head McLean is also still active and combined with banking partner Grainne Hennessy to advise Viridian Group on securing the financing for its portfolio of windfarms. It was the largest project financing of a windfarm in Northern Ireland when the £60 million deal closed in November 2010.

Arthur Cox has one of the pre-eminent figures in the industry in practice head William Day, who both commentators and clients consider to be one of the best insolvency lawyers in the country. One client who uses all of the ranked firms says: "We would view Cox's as the strongest. We would use Willie Day quite a lot. He's particularly strong, focussed and commercial. He gets things done and takes matters of our desk and gets them resolved or comes up with solutions to get them resolved."

The firm has a strong relationship with the state and Day has been at the helm for Nama (National Asset Management Agency) on several occasions in the last 12 months.

The department head is leading a team advising Nama in the ongoing €1 billion statutory receivership of Michael McNamara & Company and of Bernard McNamara. It is the first occasion the company has exercised its statutory power to appoint a receiver. In another role for the world's largest holder of debt, the firm successfully challenged a petition for the appointment of an examiner to Whelan's Quarries Group, which had its loans assumed by Nama in December 2010.

The firm is involved in several headline deals. The practice has taken a role in the examination of the McInerney Group, the construction company, which has €116 million in bank debt. Day, who one client insists is the "best lawyer in the country for examinerships," and Emily King are advising a syndicate of creditors in the case which involves a challenge to an examiner's scheme of arrangement on legal and valuation grounds. Day and Rachel Farrell are also representing RBS after it put hotel Citywest in receivership in July 2010 as it owes the bank in excess of €100 million.