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

Following a few false starts in late 2009 and the first part of 2010, the debt capital markets strengthened significantly in the second half of 2010. BBB-rated APA Group's debt issue in July of A$300 million ($323 million) ten year AMTNs (Australian Medium Term Notes) broke new ground for corporate bond issuance in Australia.

It was quickly followed by SPI (Australia) Assets' debut issue into the Australian market of A$500 million six-year AMTNs. These issues heralded the return of true corporate issuance in the domestic market.

The market's returning strength also saw new Kangaroo bond issuers. Both Korean Development Bank and Hyundai Capital Services established substantial new Kangaroo programmes, whilst Canadian Imperial Bank of Commerce generated great market interest with its successful completion of the first structured covered bond issue in the Australian market.

Australian corporates are also looking increasingly towards the wholesale debt markets to diversify financing, move away from a reliance on bank lending and to push-out maturities. Corporates are also looking towards the offshore debt capital markets and indications are that this trend will continue for at least the next two to three years.

While the wholesale domestic bond market continues to be dominated by Australian financial institutions, in 2010 there was also an increase in activity in the domestic bond market by other institutions.

"Freehills continues to give me first class advice and representation. They are a highly skilled and very knowledgeable firm regarding Australian debt capital markets," says one client.

The debt capital markets team is renowned for its top-tier technical excellence combined with commercial acumen and the last 12 months has seen them remain at the forefront through involvement in virtually all the landmark debt transactions.

"They consistently give the best and most accurate legal advice of any law firm I have worked with in Australia," comments a client, while peers highlight Patrick Lowden: "Patrick is one of the stalwarts in this field," says one.

Lowden led the team advising APA Group on the establishment of an unlimited AMTN (Australian Medium Term Note) programme and their inaugural A$300 million ($323 million), ten year corporate bond issue. This was the first of its kind in Australia, marking the opening of the country's debt markets after a few false starts and raising expectations for a deeper and more functional domestic scene.

Another notable highlight, once again led by Lowden, saw the firm advising Santos on their €700 million ($995 million), 60 year subordinated deferrable bond issue. This attracted a lot of attention as it was the first bond issue ever to get 100% equity credit for ratings purposes and is treated as debt for tax and accounting.

Finally partner Brendan Quinn was noted for acting as Australian counsel to the bond underwriter on a $354 million high-yield 144A issue for Atlantic.

In March 2012 Mallesons Stephen Jaques merged with King & Wood to form King & Wood Mallesons, the first Sino-Australian firm. In the first phase the two firms will combine their Australian, Chinese and Hong Kong partnerships under a Swiss Verein structure. Full financial integration plans are yet to be announced.

The firm retains its position in the top tier and as one of the go-to firms in the debt capital markets. Clients note the team's "depth of experience in retail bonds," stating that it is "always prepared to explore different ways to document dealers agreements".

Leading the team is Ian Paterson, "their stand-out partner on all financing matters, with technical mastery of all key issues," according to one client. While a rival partner also highlights Greg Hammond who "knows the market, understands the industry and the players, is also responsible for Mallesons' success".

The firm is committed to investing in their regional capital markets capability and has promoted two new partners this year in Anne-Marie Neagle and Joseph Muraca.

The team was busy advising the Canadian Imperial Bank of Commerce in its issue of structured covered bonds in the Australian wholesale capital market. Acting as counsels for the arrangers and joint lead managers, the team advised on what was the first issue of structured covered bonds in the Australian market and the first issue of covered bonds in Australia by a Canadian issuer.

Another highlight was acting for DBP Finance and the DBP Group on their A$550 million ($593 million) domestic MTN issue. DBP is the owner and operator of the Dampier to Bunbury Natural Gas Pipeline. The issue consisted of A$150 million fixed-rate notes and A$400 million floating-rate notes maturing in 2015.

Allens Arthur Robinsons' debt capital markets practice has enjoyed a lot of success because of the strategic relationships holds with Australia's largest corporate and banks including CBA, Macquarie, ANZ and Bank of America.

Leading the firm's practice is David Clifford who last year advised Wesfarmers' on its Euro medium-term note (EMTN) programme the first by an Australian issuer with the notes to be listed on the Singapore Securities Exchange.

In a similar deal the team advised Amcor on the establishment of Amcor's EMTN Programme and its inaugural issuance of €550 million ($781 million) fixed rate notes listed on the Singapore Stock Exchange.

Recently promoted partner James Darcy is recognised by clients as a key player in debt capital markets.

James led the team in advising Commonwealth Bank of Australia and Macquarie Bank on a A$550 million ($593 million) fixed and floating-rate note issue by DBNGP Finance. This represented the biggest local debt sale by an Australian non-financial company in more than four years.

In March 2012 Blake Dawson merged with Ashurst with the combined operation adopting the UK firm's name. Initially the merger will be focused on the two firm's Asia operations with full integration expected in 2014.

The legacy team at Blake Dawson "is very good, very responsive, has quality partners and strong associates" according to one client. "Partner Paul Jenkins has a strong understanding of international and Australian practice law."

The debt capital markets team has worked on some of the market's most innovative deals in the past 12 months. On one Jamie Ng and James Morris advised charity The Chris O'Brien Lifehouse at RPA on the establishment and first issue under its A$35 million ($38 million) Charitable Bonds programme. This was Australia's first such issue, a capital markets instrument designed to provide both a financial and social return.

Other highlights for the team over the last 12 months include acting for Goldman Sachs on Boart Longyear's inaugural $200 million Rule 144A note issue, acting for Coca-Cola Amatil on its EMTN programme and note issues and Atlantic on its secured $335 million Rule 144A note issue. The latter was needed to complete the construction of the Windimurra vanadium project in Western Australia.

The team also advised Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) on APT Pipeline's first MTN issue and the and the issue of a ten year bond in the Australian market.

"I like Clayton Utz because they are comprehensive, thorough and professional," says one client.

Last year the team hired Andrew Jinks from Allens Arthur Robinson. Jinks will co-lead the practice with Louise McCoach, who on client describes as "very prepared and knowledgeable in corporate debt structures and market practice".

Covered bonds have become a key feature in the Australian market and the team has direct experience here having acted on a number of foreign covered bond issuances in the UK and the US.

One of the highlights for the past year was advising on the $500 million Rule 144A guaranteed senior secured notes issued by Sydney Airport Finance Company and guaranteed by Southern Cross Airports. The team acted for BNYM as the security trustee on the transaction which was one of ten Rule 144A issuances in the market during 2010.

Another notable transaction was the $350 million USPP guaranteed senior notes issued by Leighton Finance (USA) and guaranteed by Leighton Holdings and others. The negotiation of the USPP covenants in favour of the note purchasers were relatively protracted given the complexity of the covenant package which Leighton has established for its senior lenders.

Head of the department at Baker & McKenzie, Andrew Reilly enjoys a strong reputation with his expertise in the industry, especially on US and foreign securities offerings by Australian and New Zealand companies.

The team represented Mighty River Power on its $200 million US private placement of debt. This was the first such transaction by the company, which provided further diversification of its funding sources and offered longer term funding options than currently available in New Zealand.

A similar deal saw the team advise Vector as US counsel on its $182 million US private placement of debt.

Minter Ellison's significant track record in debt capital markets has earned the team a place among the top firms in this practice area in Australia.

The Melbourne team is headed by David Eterovic who is described as "particularly effective in relation to the provisional advice on commercial negotiations and commercial terms", by one client. The team recently acted for the issuer on the corporate bond issued recently by Australian Unity.

Another notable highlight saw the team again acting for the issuer in a A$200 million ($216 million) secured medium term note (MTN) programme to refinance interests of AMP Shopping Centre Fund. In this transaction the difficulties included structuring security trust and negotiating inter-creditor arrangements between a bank syndicate and bondholders.

Allen & Overy's debt capital market team was involved in advising Fortescue Metals Group last year in relation to a Rule 144A unsecured bond offering which raised $2.04 billion to be used for refinancing its senior secured bonds. In December 2010, the team again completed a similar transaction valuing at $1.5 billion to be used to meet costs of expanding Fortescue's existing operations.

Another notable highlight was advising Lloyds TSB, Australia branch, in relation to the establishment of it's A$15 billion ($14 billion) Debt Issuance Programme and a number of fixed rate and floating rate issuances under the programme.

The Gilbert + Tobin debt team "have been exceptionally good" and possess "excellent technical ability combined with magic circle experience", according to one client.

This Duncan McGrath led practice advised Australia and New Zealand Banking Group and Westpac as arrangers and lead managers in a highlight transaction. The complex transaction involved a $378 million fixed rate medium term issuance by Australia Pacific Airports under its newly established $1.62 billion MTN programme.

Norton Rose stands out for its exceptional ability of being solution focused in negotiation and solving potential problems", says one client.

The firm advised Brisbane Airport Corporation, the issuer, on a $1.62 billion Australian MTN programme. This transaction had a unique element of complexity in that the programme is secured by the existing bank debt security package, when secured Australian MTN programmes remain relatively uncommon.

Another highlight was assisting JPMorgan Chase Bank and Barclays as Australian underwriter's counsel on a $395 million offering of senior high-yield Rule 144A/Reg S notes by Mirabela Nickel.

Sidley Austin's debt practice works closely with the leading local Australian and New Zealand counsel on a broad range of transactions. The firm advised Sydney Airport Finance Company in its issue of $500 million of Rule 144A/Reg S guaranteed senior secured notes.

"I think Sidley Austin is a top-quality team, fantastic track record and is one of the most experienced in the market." One client noted. "They work well with issuers and understand issuers' concerns in going through this type of process."

Skadden Arps Slate Meagher & Flom led by Adrian Deitz and Mark Leemen is mainly feted for its international scope. "We've used Skadden's international network and the international network has been helpful," says one client.

Last year saw the team advise QBE Insurance Group in connection with a $850 million Reg S offering of zero coupon senior convertible bonds due 2030 by QBE Funding Trust V, a special purpose vehicle (SPV) of QBE Insurance.