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

Shearman & Sterling has a world-renowned capital markets practice, and has worked on some of the most complex and innovative transactions for over 100 years. "We see them on a lot of deals," says one peer. Competitors note that Shearman is a particularly strong on transactions with a Latin American component, and the firm counts the first registered IPO of a Brazilian company with the US SEC amongst its achievements.

The firm has strong ties with the SEC. A number of partners previously held positions within the organisation, giving the firm's team useful insights in the current regulatory environment. In March 2011, partner Lona Nallengara left to join the commission.

In a deal which closed in September 2010, Shearman & Sterling advised on the $67 billion Petrobras offering, the largest in history. The disclosure issues faced by the company were complex, because Petrobras is a huge company and is partially owned by the Brazilian government. Petrobras will use $42 billion of the money from the sale to buy rights to extract up to five billion barrels of oil from waters off the coast of Brazil from the country's government. Shearman represented underwriters Bank of America Merrill Lynch, Bradesco BBI, Citi, Itau BBA, Morgan Stanley, and Santander.

The firm also represented Citi, Credit Suisse, Deutsche Bank Securities, JPMorgan and RBS as joint book-running managers in a registered shelf takedown of investment-grade notes by American Tower Corporation. The $1 billion deal closed in December 2010.

Shearman & Sterling continues to impress peers and clients with a standout derivatives group and a respectable structured finance and securitisation practice. The firm is widely recognised both for its regulatory expertise and its experience with structured products and exchange-traded and OTC derivatives.

Several competitors express admiration for partner Donna Parisi. "She's very articulate, very smart and she's been doing a significant amount of work with the Dodd-Frank reform," says one competitor. A client who has worked with the firm in securitisation says he has been "very satisfied with the personal dedication to deliver a quality legal product on time and within a prescribed budget."

The firm represented Bank of America Merrill Lynch in managing its exposure to Lehman Brothers entities following Lehman's bankruptcy. This included an analysis of derivatives and other exposures and advice regarding termination, liquidation, netting and set off rights pertaining to positions and collateral. The practice also provided strategic advice on managing counterparty risk.

Shearman & Sterling is also advising the Depository Trust & Clearing Corporation in establishing and operating infrastructure services for the derivatives industry. These include the establishment of DTCC Derivatives Repository. The new entity will serve as a repository for transaction data for equity and credit derivatives, in accordance with new regulatory requirements to be imposed under Dodd-Frank and expected European regulation.

Shearman & Sterling has a long history as a prominent player in bank lending. The firm advises on some of the most complex international and domestic transactions, and has a solid regulatory practice. Peers note that the firm has particular strength representing subordinated lenders in sophisticated deals. "If it's a supersized deal, I would go to Sherman & Sterling," says one competitor, while another notes, "Shearman has been up-and-coming."

Competitors acknowledge partner Bradley Sabel, formerly of the Federal Reserve, as one of the firm's leading regulatory lawyers. One rival says, "He has been there a long time and he's really a super lawyer."

Clients were also impressed with the firm's work: "They are able to give a very comprehensive answer," says one client of the firm's banking practice. "Their lawyers are exceptionally good at the large transactions."

Recent highlights of the firm's work include its representation of parties in the $3 billion acquisition financing of clothing chain store J Crew, which was widely covered in the national media. Shearman & Sterling represented Bank of America as administrative agent, and joint lead arrangers and bookrunners Merrill Lynch and Goldman Sachs, in a $1.2 billion term loan and a $250 million asset-based revolving credit facility. The deal closed in March 2011.

The firm also advised the joint bookrunners and lead arrangers in a $2 billion five-year term loan and a $1.25 billion three-year revolving credit facility for Petróleos Mexicanos (Pemex). Pemex received commitments from 17 banks, not including the leads. Partner Denise Grant led the deal, which closed in 2010.

With a global practice that is the envy of its rivals, Shearman & Sterling is ideally positioned to tackle big, cross-border M&A deals. In 2009 and 2010, the firm advised on M&A transactions totalling $707 billion worldwide. One client praises its lawyers' "crisp and concise" communication, adding, "They are able to give a very comprehensive answer. Their lawyers are exceptionally good at the large transactions."

In a deal announced in April 2011, the firm is representing Nasdaq OMX in its joint $11.3 billion bid with IntercontinentalExchange for NYSE Euronext. The proposal represents a 19% premium over the price proposed by Deutsche Boerse, based on Deutsche Boerse's closing share price as of March 31, 2011, and a 27% premium over NYSE Euronext's unaffected stock price on February 8, 2011.

Other notable work includes advising mobile software provider Sybase in its agreement to be acquired by SAP America, a subsidiary of Germany-based SAP, which provides business software. SAP America made an $5.8 billion cash tender offer for Sybase common stock. The tender offer was followed by a merger, and included a top-up option. The deal, which was announced in May 2010, was a cross-border transaction with a foreign buyer, and involved German and US law. The firm also represented Sybase in related shareholder litigation in California and Delaware.

Shearman & Sterling has made international headlines this year with some of the largest and most complex project finance deals around the world. Clients appreciate the firm's "international scope" and "flexible and reasonable" fee structure. Peers note that the firm is particularly strong in the natural resources and mining sectors. One competitor says, "They do the complicated cross-border deals."

The firm represents major players including GE Energy Financial Services, Carlyle, Citibank, Macquarie, Fortress Investment Group and the US Department of Energy. "They are extremely good at understanding your business sensitivities," says one client. "You feel like you can trust them. They will alert you on something they know you will care about."

Shearman & Sterling's partners have impressed both peers and clients. One customer who regularly deals with Alexandro Padrés and Gregory Tan describes them as a "class act", adding that they are "pro-active", with an "ability to lead". A rival who has worked across the table from Robert Freedman, co-head of the firm's sustainable development group, says, "He's particularly reasonable and he's smart." A client who worked with Cynthia Urda Kassis says, "It was a very challenging negotiation and she was just outstanding. Even at a good firm, she was a star." Another customer describes Barbara Edwards as having "a great demeanour, which we always appreciate in a tough spot."

In January 2011, the firm advised Essar Global as sponsor, and its subsidiary Essar Steel Minnesota as project company, on the financing of a $1.1 billion mining project in Northern Minnesota. The scheme, known as the Integrated Iron Ore Pellet Plant Project, will be the first facility in North America which handles all aspects of the iron ore mining to steel-making process on-site.

The firm is currently representing Banco Nacional de Desenvolvimento Econômico e Social as the primary financier in a proposed $19 billion high-speed rail project connecting the Brazilian cities of São Paulo and Rio de Janeiro. The venture is set to be the largest infrastructure project to date in Latin America and will have far-reaching social and economic consequences.

Shearman & Sterling has a prominent restructuring & insolvency team, which has been involved in some significant cases in the US and internationally. Peers have kind words for the firm's restructuring team, particularly partner Douglas Bartner. "They have some talented people - Bartner is excellent," says one competitor. "I think very well of them."

In an ongoing case, the firm is representing Citicorp North America and Citibank, as administrative agent, for a $1.5 billion senior secured term loan facility for Capmark Financial Group. The loan has been made in connection with the Chapter 11 cases, which began in October 2009, of Capmark and some of its affiliates.

In an ongoing case worth over $5 billion, the firm is representing Nomura International, Nomura Securities, and Nomura Global Financial Products, in connection with the Chapter 11 proceedings of Lehman Brothers Holdings and its debtor affiliates. The Lehman debtors are seeking to disallow all or portions of the claims submitted by Nomura on account of terminated derivatives transactions.