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Shearman & Sterling is on the way up. The firm has just consolidated its team after losing (in 2009) Annette Schild and Silvio Cappellari to Arnold & Porter, and more recently adding a list of high flying Howrey partners: Götz Drauz, Trevor Soames (former co-chair of Howrey's global practice), Geert Goeteyn, Stephen Mavroghenis and Miguel Rato. The five partners also brought with them a team of ten associates.

"They have hired substantial resources from Howrey," says a peer. "It has a strong UK office and good practice in the US, but it will take time for the new team to settle in," says another peer, adding: "Lars Kjølbye and Drauz had a really great partnership at Howrey and now they have split, what effect will it have?"

The new team needs time in the market to fully re-establish itself but in many ways it is the new contender for the very top of the table. Its list of recent mandates is already impressive. Meyer-Lindemann led teams to advise Cargolux in the cartel investigation into price fixing in the air freight sector. Cargolux was at the time of writing in the court of appealing and in the process of handling damages claims.

On merger matters, Drauz and Mavroghenis were advising Caterpillar on its $8.6 billion acquisition of Bucyrus and was advising Nestlé of a £39 billion disposal of a majority interest in Alcon to Novartis. In 2010 aviation expert Soames helped United Airlines get clearance for its combination with Continental Airlines and was continuing to advise United on investigations into the STAR alliance.

Shearman & Sterling's equity capital market work has been in line with the market's top players, "I think really it's Linklaters, Cleary Gottlieb and Shearman & Sterling doing most of the deals," says one peer, while another one agrees: "They do superb work, they're present on all the major transactions and those three firms are really the leaders in the market. There's no question for those three to be the tier-one firms."

The key partner involved in most of the equity capital markets deals is Robert Treuhold. One outstanding transaction saw him work alongside with Hervé Letréguilly advising the placement banks, including BNP Paribas, Credit Suisse, in relation to the €96.25 million block trade of Medica shares sold from BC Partners through an accelerated book building (ABB). Following the transaction, BC Partners holds 30.5% of the capital and voting rights of the French dependency care market player.

Another highlight saw Treuhold work together with Bertrand Sénéchal representing the underwriters, including Deutsche Bank and Lazard-Natixis, in relation to Theolia's €60 million capital increase with preferential subscription rights. The deal was the latest step in the financial restructuring of Theolia. "Letréguilly's very well-known," says one peer, while another one agrees: "Herve Letréguilly's definitely very good, and he does regular capital markets work."

The other peer then goes on to single out the firm's other notable lawyer Sami Toutounji by saying: "Sami's very good and he does employment offerings. He doesn't do regular capital markets transactions, he's the leader in Paris for employment offerings."

Again July 2010 saw Treuhold and Sénéchal represent the issuer Novagali Pharma in relation to its €22 million IPO listing on the Euronext Paris. In the same deal, the team also advised the underwriters, and the transaction was believed to be one of the few IPOs in 2010 in the biotech industry.

Interest in high-yield debt has been seen right across Europe due in part to a lack of general bank liquidity. Shearman's strong reputation in this area puts it in a good position to capitalise on any upswing.

One example saw the team work on a 'double LuxCo' (acquisition structure) trans representing the underwriters, including Credit Suisse, Citigroup, Morgan Stanley, Crédit Agricole, and Société Générale in relation to Picard Bondco's €300 million high-yield bond offering. It is considered to be the first French high-yield deal for a leveraged acquisition finance transaction since the credit crunch.

In September 2010, a team, headed by partners Sénéchal and Mei Lian, advised the firm's long-term client Rhodia in relation to its tender offer of buying back €500 million in floating rate senior high-yield notes due 2013, as well as the concurrent offering of €500 million senior high-yield notes due 2018. Elsewhere the team then advised on Rhodia's $400 million issuance due in 2010. Sénéchal also teamed up with partners Pierre-Nicolas Ferrand and Clifford Atkins, to advise on Labco's high-yield notes offering. This was the first LBO refinancing which is coupled to a high-yield issuance and a senior revolving credit facility.

Another notable deal saw the team, including Cyrille Niedzielski, Sami Toutounji, and Aline Cardin, advised Pierre & Vacances' €115 million oceane (convertible) bonds issuance. In the same deal, the team also advised the underwriters.

When comes to Shearman & Sterling's banking practice, observers say that "the firm had a remarkable panel of banking clients, mostly US banks," while another adds that due to the loss of partner Martin Lebeuf who joined French domestic Darrois Villey Maillot Brochier in 2009, the firm was hit hard in terms of its banking team.

Last year, the largest mandate at the firm saw Pierre-Nicolas Ferrand lead the team advising a consortium of banks including, Crédit Suisse, Citigroup, Morgan Stanley, Crédit Agricole CIB and Société Générale in connection with the €1.6 billion acquisition financing of a French frozen food company Picard and a related stand-by bridge facility agreement by Lion Capital.

Another highlight saw the Paris team advising Labco in regards to its €500 million high-yield bond offering and its €135 million revolving credit facility. An ongoing transaction saw Ferrand again involved when he led the team advising Geoxia as debtor in the restructuring of its overall bank liabilities and capital structure. The mandate includes a €200 million high-yield bond offering and a €60 million revolving credit facility.

Shearman & Sterling has been taken in some big transactions, "not a lot, but big ones" according to one of the firm's peers. The key practitioners involved in the firm's corporate mandates are Cyrille Niedzielski and Guillaume Isautier, who led the team advising the major shareholders of the Louis Dreyfus group in relation to its reorganisation worth $10 billion.

Another ongoing transaction saw the duo lead the team advising the government of Algeria on its contemplated acquisition of Djezzy, Orascom Telecom Algerie's Algerian mobile phone unit.

The managing partner of Shearman & Sterling's capital markets practice for Europe and Asia, Stephan Hutter, is respected by peers and valued by clients. "He is very elegant and eloquent in presenting solutions and difficult messages to the client. He is one of the most experienced capital market lawyers in Germany," says one client, adding: "They have a good understanding of what we do and we are quite happy with that."

Partners Hans Diekmann and Marc Plepelits have been active advising the expanding REIT (real estate investment trust) Alstria Office, which completed two capital raisings of €50 million and €280 million in September 2010 and March 2011, respectively.

A strategic move by Hochtief saw partners Katja Kaulamo and Plepelits advising Qatar Holding as sole subscribers to the construction group's €400 million 10% capital increase. The acquisition diluted the construction group's shares sufficiently to halt the hostile takeover bid of Spanish rival ACS, at least temporarily, by increasing the value of any future proposal.

The firm also received notable instructions from underwriters. Hutter and Kaulamo advised Deutsche Bank and Raiffeisen Centrobank in connection with Austrian energy supplier EVN's capital increase in October 2010 and RBS and UniCredit in regard to Sky Deutschland's capital increase in September of last year. Both deals raised €180 million for the issuers.

Prior to its eventual sale the owners of Kable BW were considering floating the German cable operator. Hutter and Kaulamo were advising the private equity house, led by Credit Suisse, Deutsche Bank and JP Morgan, on a dual track IPO and trade sale procedure and an offering of €1.2 billion Euro-denominated high yield bonds by Kabel BW in March 2011.

Shearman & Sterling is noted for being very active on the high-yield market and its offering in this capacity is well respected by the market. The change in the German bond act, which allows for high-yield assets to be sold under German law, has benefited the firm in the last 12 months.

Managing Partner of Capital Markets Europe and Asia Stephan Hutter and Katja Kaulamo were involved in the first high-yield bond guaranteed and secured under the new 2009 German Bond Act (Schuldverschreibungsgesetz). The pair advised a syndicate led by Citigroup and RBS in connection with offering of €750 million in high-yield bonds by Conti-Gummi Finance in July 2010.

A more substantial and recent high yield issue saw the firm advise the initial purchasers , led by Credit Suisse, Deutsche Bank and JP Morgan, in connection with offering of €1.2 billion Euro denominated high-yield bonds by Kabel BW Erste Beteiligungs and Kabel Baden-Württemberg in March 2011.

In addition to assisting the capital markets team on several notable bond issues, Shearman & Sterling's banking and finance partners Winfried Carli and Esther Jansen have finalised some significant acquisition finance work in the last 12 months. Jansen advised on a €455 million cavern portfolio by an investment fund structured by IVG Institutional Funds closed in January 2011. Another more sizeable transaction saw Jansen working in connection with the firm's New York office to advise a syndicate of banks on a €5 billion one year credit facility to Toyota Motor Credit Corporation and some of its affiliates.

In June 2010 Jansen closed an acquisition financing for Aditya Birla Group for its purchase of Columbian Chemicals, a portfolio company of One Equity Partners.

Joint managing partner of the Shearman & Sterling's German offices, Harald Selzner, advised Munksjö paper producer on the acquisition of the speciality paper business of English listed company Arjowiggins.

M&A partner Marco Sustmann has also been active for the firm, leading a team on acquisition of a 9.1% stake in the share capital of construction company Hochtief for the Qatar Holding Company in December 2010.

Shearman & Sterling's corporate team is led by Harald Selzner, who is also head of the firm's worldwide M&A practice group and co-managing partner of the German offices.

The firm advised the Qatar Holding Group, the Qatari government's investment arm, on to the acquisition of a 9.1% stake in the share capital of construction company Hochtief and on the purchase of the pharmaceutical intermediates business of Genzyme by International Chemical Investors.

In an ongoing deal, which began in 2009, the firm has been advising Aabar Investments on the creation of an investment joint venture, ABAG Aktiengesellschaf, with Austrian company Berndorf.

Sherman & Sterling's five-partner restructuring and insolvency practice has been active for both creditors and debtors in the past 12 months.

A standout deal saw Rainer Wilkie advise private equity firm Axel Springer in the insolvency proceedings for the PIN Group, of which it is a shareholder and creditor.

A further matter saw Esther Jansen act for a German service provider in the €300 million restructuring of its bank debt.

Shearman's practice took a major hit in April 2011 with the departure of key partner Ward McKimm to Kirkland & Ellis. With capacity such a defining feature of the UK market at the moment peers pointed out that this will have an impact: "If you look at Shearman they have lost Ward McKimm and made up some associates but they don't have that depth anymore," says one partner.

The team is now led by the popular Jacques McChesney and the firm has also made up promising associate Apostolos Gkoutzinis to partner in recent months. "Shearman is the interesting one," says one peer, "they only really have Jacques there now and they have made up a partner which has been done in a slightly reactionary way in my opinion, it will be interesting to see how that plays out."

What the firm can fall back on is a strong London banking team and with the market looking for the holy trinity of bank, bond and high-yield expertise from its advisors, now the firm can build from a position of strength on the banking side. "Jacques is still a good lawyer," says another peer. "They'll come back and do alright, their bank practice is wonderful."

One client of McChesney pointed out that the team was in good hands: "I've done many transactions, strong working relationship, I can call them up and ask questions and explore topics with them whenever I want. The partner relationship is critical."

Deal-wise, the firm is still winning good mandates including advice to Advent International on two batches of senior secured notes valued at £425 million and £175 million respectively. The issue formed part of the financing of the acquisition of The Priory Group from RBS. Utilising its connections, the team also acted for one of Advent's portfolio companies Oxea Finance & Cy on multi-currency offerings of €300 million and $260 million in senior secured notes, the deal saw the team working in conjunction with its banking team who advised Oxia on an additional revolving credit facility.

Another acquisition linked deal saw departed partner Ward McKimm work alongside Gkoutzinis acting for Ardagh Packaging Finance on two dual tranche notes issues, one valued at €1.1 billion and one at $800 million. These funds formed part of the financing for the Ardagh Group's €1.7 billion acquisition of Impress Coöperatieve with a certain part being used for the refinancing of the group itself. The team also acted for Ardagh Glass holdings on a €180 million 8.75% senior notes issue used for a refinancing of its high-yield bonds.

Finally McChesney and his team acted for the initial purchasers including Barclays, HSBC and Standard Chartered on MBPS Finance's $320 million notes offering in November 2010, the first ever issue by a Gulf company.

Shearman & Sterling remains one of the strongest US bank side practices in London. Led by Clifford Atkins, the team continues to act for clients such as Barclays, Bank of America Merrill Lynch and JPMorgan.

Last year the team acted for two of the above when it advised Barclays Capital and JPMorgan as the arrangers and Barclays as facility and security agent on the refinancing of a €5 billion debt of the Ineos group.

The team can also draw on its strong high-yield capacity, which has become increasingly useful in the ever-expanding hybrid market. Though numbers in the department are slightly down after the departure of Ward McKimm earlier this year, the team can still provide strong support.

On the acquisition finance front, the team acted for a group of banks including Citigroup, Morgan Stanley and Société Générale on the €1.6 billion granted to Lion Capital for the acquisition of French food producer Picard. The deal incorporates a 'double LuxCo structure and the financing also included a high-yield bond.

The above deal was led in London by Caroline Leeds who also advised Advent International as it secured the financing for the acquisition of the Priory Group from RBS. Another hybrid structure, the £70 million credit facility sat alongside a £425 million high-yield bond and a £175 million issue of senior notes.

Finally, Anthony Ward acted for cable operator Ziggo on the amendment of its senior credit facility, done to allow the issue of high-yield bonds, which the firm also assisted with.

"In a sense I'm quite glad to see Shearman & Sterling here. I think Barney Reynolds is good and he's got some good guys. They merit being there," was one practitioner's view of Shearman & Sterling, a view which chimed with general market opinion which had practice head Reynolds held in high regard by his peers. Clients also had praise: "Highly technically adapt, he knows the background of what he is talking about, he's at the cutting edge of what is going on, it comes easy to him."

As with some of its US peers, the practice is relatively small compared to some of the larger operators in the market. "Barney is a one man practice, he's a good guy and he has good clients but I think it is just him," says one lawyer.

The firm's work last year was largely focused on derivatives work and clearing related matters. Highlights included acting for DTCC on setting up a new subsidiary DTCC Derivatives Repository to run its European operations. In a similar mandate the team was also involved providing advice to a central bank on the development of structures related to OTC derivatives clearing.

On this latter deal, Reynolds worked alongside Patrick Clancy and the pair also provided advise to ICE (Intercontinental Exchange) on the continuing structuring of its CDS clearing operations.

Making good use of its Latin American links, the team also acted for BM&F Bovespa the securities and commodities exchange of Brazil on its application to the FSA (Financial Services Authority) to be recognised as an overseas investment exchange and clearing house.

Shearman's M&A team, led by Laurence Levy secured a role on one of the market's most high-profile mandates last year when it acted for New England Sports Ventures on its acquisition of Liverpool FC. The deal was complicated when certain equity holders in the club tried to prevent the board from going ahead with the agreed deal. This resulted in litigation in the UK and US, which Shearman also acted on and resulted in the original deal going ahead.

One client who worked with Levy and Lucy Graham points out their individual qualities: "Lawrence had a logical mind, and very stable in situations of conflict. Lucy Graham, she came in at the most difficult moment. She was very organised very good and was very professional, great to work with."

Other substantial mandates included acting for Ardagh Glass on the €1.7 billion acquisition of Impress Cooperative, holding company of the Impress Group. The team also assisted Ardagh on the financing which involved a high-yield debt issue. In a similar area, head partner Levy also assisted Tata Steel on its sale of Teeside Cast Products Business to Sahaviriya Steel Industries Public for £475 million.

The team also acted for BSkyB in regard to a joint venture with ADMIC to establish a new Arabic news channel in the Middle East. Based in Abu-Dhabi the channel will broadcast across the region.

Shearman & Sterling's strength in banking has been successfully replicated by its project team. The team maintains a strength in oil and gas and energy projects with a particular focus on the Middle East and North African (MENA) region.

Highlighting this, last year the team acted for private equity firm Citadel Capital and the Egyptian Refining Company (Takrir) on the $3.5 billion financing for the redevelopment of its hydrocracking refinery at Mostorod near Cairo. The financing was the largest project financing in Africa to date.

Another highlight, this time on the lenders side, saw Kenneth MacRitchie lead the team acting for BarCap and HSBC on the $430 million bridge loan to Delek Drilling, Avner Oil Exploration and Dor Gas for the exploration and development costs related to the newly discovered Tamar natural gas field off the coast of Israel.

There were also some personnel changes in the department with the departure of David Platt to Pinsent Masons in July 2010. However the numbers wee replenished when the firm hired Christophe Asselineau from Simmons & Simmons in May 2011.