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

The last 12 months have been positive for the Australian loan markets. "We saw renewed optimism in the markets which led to improved borrower activity," says one partner. The first half of the year saw an increase in lender appetite bringing with it liquidity, although deal flow was limited: "Borrowers were still cautious which meant new money deals were rare," one partner says.

The latter half of 2010 saw an escalated deal pipeline with a large proportion of total loan volume for the year completed in the fourth quarter. Leveraged deals returned and there was an increased focus on bridge facilities and underwriting after a noticeable absence during the global financial crisis.

The standout deal was the A$2.7 billion ($2.9 billion) acquisition of hospital operator Healthscope, where competing bids by both the TPG/Carlyle consortium and KKR were fully financed. The successful TPG/Carlyle deal closed with an A$1.55 billion loan provided by a club of 17 lenders, with a healthy 'take-up' on its subsequent syndication.

A leading partner suggested that "liquidity in the Australian corporate debt market was abundant for the 'right' borrower, generally investment grade rated corporate and industrials and/or solid established existing customers with good track records and prospects."

A great example was Origin Energy successfully closing its A$2 billion refinancing in April 2010 and it has just raised a further A$4 billion to fund its acquisition of energy assets from the New South Wales government and to refinance existing debt.

"They legitimately have a team of superstars on their roster," says one partner about Allens Arthur Robinson's banking team. Partner Phillip Cornwell is also praised for his "ability to prioritise the legal issues and achieve innovative results which is second to none", according to one peer.

A clear highlight for the Allens Arthur Robinson banking team last year saw it act for Origin on A$5 billion ($5.4 billion) of bridge and syndicated term facilities. This funding was used for the acquisition of the Integral Energy and Country Energy retail businesses from the New South Wales state-owned energy network businesses and the entry into GenTrader arrangements with Eraring Energy for the general corporate purposes of the Origin group.

This was one of the largest acquisition financings in the last 12 months and the deal involved complex inter-relationships between the bridge and term facilities and the takeout financings proposed to be implemented in order to repay the bridge.

Another highlight for the firm saw it advising a number of banks in relation to the facilities made available to the Nufarm Group, including a A$900 million 12-month loan provided by Australia and New Zealand Banking Group (ANZ), National Australia Bank (NAB), HSBC Group and Rabobank. Working with McGrath Nichol, the firm assisted with waivers of breaches of certain Nufarm financial covenants as well as securing short-term funding for the group.

The new 12-month facility refinances existing bilateral loans, and provides more flexible covenant ratios that better reflect the seasonal pattern of the Group's operations. In addition to the short-term facility the firm also helped with finalising longer-term debt facilities, mandated through Rabobank, which includes a A$300 million asset-backed securitisation facility and a A$600 million medium-term syndicated bank loan to refinance the A$900 million deal.

"Freehills has high quality service with broad range corporate work ability. The capable staff with experienced partners involved makes them pretty good," says a client.

The team retains its position as a top tier firm this year. One peer praises Andrew Booth: "he is very committed to going over-and-above to get the deal done and is able to pull together complex deals with minimal fuss and fanfare". Last year he led the team in advising the mandated lead arrangers and underwriters on a A$1.4 billion ($1.5 billion) facility to be provided to Tabcorp's casino business (Echo Entertainment Group) if that business is demerged from the Tabcorp Group.

The team also acted for the financiers in relation to a new A$750 million syndicated facility for Crown, a restructure of Crown's existing bilateral club facilities and an amendment of the company's existing A$600 million syndicated facility.

Dan Brealey, another highly regarded partner, acted for Orica and the DuluxGroup in relation to the establishment of a A$400 million revolving cash advance facility for the DuluxGroup. The facility includes a three year tranche and a five year tranche and is provided by a syndicate of seven domestic and international banks.

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.

"As much as it irritates me, Mallesons Stephen Jaques still sets the barometer for every banking team in Australia," admits one rival and the market was in agreement regarding the firm's quality.

Last year the team acted for a syndicate of 17 banks providing senior debt financing for TPG Capital and The Carlyle Group's A$2.7 billion ($2.9 billion) acquisition of Healthscope pursuant to a public takeover by scheme of arrangement.

This deal involved the acquisition by Origin Energy of certain New South Wales power assets including the retailing activities of Country Energy and Integral Energy. The takeover of Healthscope was Australia's largest private equity deal since 2007 and the first test of the capacity of Australian debt markets to support a large private equity deal since the global financial crisis.

Major transactions also involved acting for Australia and New Zealand Bank (ANZ), Bank of America, JPMorgan Chase, Macquarie and National Australia Bank (NAB), which provided facilities totalling A$4.24 billion to Origin to assist with acquisitions, refinancing existing loan facilities and for general corporate purposes.

Another highlight for the team was advising QR National and its subsidiaries in relation to the A$3 billion ($3.2 billion) unsecured syndicated facility agreement they entered into with 11 major domestic and international banks for the purpose of refinancing the group's existing financial indebtedness, to pay for the cost of the IPO and to fund the group's capital requirements post IPO.

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.

On client spoke highly of the legacy team at Blake pointing out that it  "has a team that can deliver quality and market-relevant advice."

Last year the team acted for a syndicate of banks on the post IPO A$3 billion ($3.2 billion) syndicated multi-currency revolving facilities made available by the syndicate banks to QR National.

The debt financing facilities were put in place to support the listed company's working capital requirements. This matter involved the largest IPO in Australia since the listing of Telstra and this particular transaction was significant to the State of Queensland in its continuing drive to privatise certain assets to raise cash.

The firm has built a market leading Personal Property Securities (PPS) practice and is advising eleven banks on their response to the PPS reforms.

Other notable transactions included advising Qantas on the refinancing of the term loan and standby tranches valued at A$1.245 billion syndicated loan note facility, underwritten by Australia and New Zealand Banking Group (ANZ) and BNP Paribas.

The firm also acted for Austar United Telecommunications in relation to its major core debt refinancing. In this transaction the team constructed the in-built flexibility for future refinancing and forward starts, express debt buy-back scheme for added flexibility and a tiered covenant package based on leverage and interest cover.

Gilbert + Tobin is "very knowledgeable, very experienced, and willing to come up with ideas that may be outside the box" and "their advice is always professional, timely and commercial," comments a client.

Acting for major organisations including Australia's top four domestic banks the firm is making an effort to build up its practice further in banking. The team is led by John Schembri, a very "technically sound individual" according to one peer, "who has the ability to make the most complicated matters simple". He has been active in the equity bridge space advising a number of the leading private equity funds and lenders in relation to the provision of debt facilities to bridge fund equity raisings.

The firm is advising Pacific Equity Partners and related funds worth A$200 million as shareholders and secured creditors of REDgroup Retail (the owner of Borders Books, Whitcoulls and Angus & Robertson in Australia and New Zealand), which is in administration. Another significant highlight saw partner Nick Grambas, "always on top of the matter at hand" according to one client, advise Macarthur Water Pty (Macarthur), on the ten year extension of the existing Water Filtration Agreement with Sydney Water Corporation and an A$85 million additional project finance facility. The deal also involved changes to underlying project documents, including the operation and maintenance agreement and the sale of UU Australia Operations Holding interest in MW Australia to Mitsubishi Consortium.

Minter Ellison for the past 12 months has acted for bank syndicates and corporate companies in financing for major international and national acquisitions in the property, health, telecom, fuel and agribusiness sectors.

A client comments that they have "a certain level of confidence in working with Minter and getting quality, knowing you've gone through the steps to knowing you've negotiated the best outcome you can. It does reflect the individual partners, but the culture of a firm adds some importance as well".

Leading lawyer Daniel Marks led the team in a A$1.1 billion ($1.2 billion) transaction in syndicated facilities of the ING Industrial Fund (IIF), a listed Real Estate Investment Trust (Reit), for Goodman Group consortium's takeover of IIF by scheme of arrangement and the debt aspects for the acquisitions by listed Mirvac Group of Westpac Office Trust and Mirvac - Real Estate Investment Fund (M-Reit) by scheme of arrangement.

David Eterovic another highly regarded partner at Minter Ellison acting for Westpac Banking Corporation on the provision of A$230 million of syndicated facilities for Australian Unity's acquisition of Westpac Funds Management's Diversified Property Fund.

Another highlight for the firm saw it advise Archer on the provision of $270 million syndicated leveraged finance facilities for Archer's acquisition of Gull Petroleum.

The team won a series of mandates to advise on acquisition financing from banks for consolidations. Stewart Robertson was particularly active in this area, acting for bank financiers on debt financing to businesses including Borg Manufacturing and Primo Meats Group to acquire distressed assets of former competitors.

Led by Grant Fuzi and Angela Flannery, last year the team at Allen & Overy advised Kohlberg Kravis Roberts (KKR) on the debt financing bid for Healthscope, an Australian listed health service business. Although the bid proved unsuccessful, this particular deal required financing involving senior syndicated debt as well as a mezzanine tranche.

Another highlight saw the firm act for Australia and New Zealand Banking Group, Bank of Tokyo-Mitsubishi, DBS Group, Overseas-Chinese Banking Corp, United Overseas Bank and National Australia Bank in relation to the long-term funding for the Singapore Stock Exchange's proposed $7.8 billion takeover of the Australian Stock Exchange (ASX).

The Corrs Chambers banking team is rated for its credentials across all major areas of banking and is praised by a rival partner who suggests that "the team is filled with solid lawyers".

The departure of Tim Barton and Patrick O'Grady to Henry Davis York initially raised alarms about the team's banking practice, but this notion was quickly dispelled by the lateral hire of partner Brad Robinson from Mallesons Stephen Jaques and Jeremy King's arrival from Blake Dawson.

Clayton Utz boosted its team last year with the hire of Andrew Jinks from Allens Arthur Robinson. "A special talent that's always great to see on the opposite side" is how one rival partner describes him.

Besides growing the size of the banking team, 2010 also saw Clayton Utz acting for the commercial lenders in a complex A$2.6 billion debt/equity swap and debt refinancing arrangements including their support for the sophisticated scheme of arrangement mechanics that underpinned this de-leveraging process.

This was one of the most challenging deals in the Australian market in 2010 and it was made more intricate by the need to balance the interests of significant private equity/hedge fixed debt, bought in the secondary market with existing commercial bank debt-led syndicates and an arduous and complex refinancing negotiation.

The Henry Davis York banking team has been actively and strategically growing its practice through the lateral hiring of Tim Barton and Patrick O'Grady from Corrs Chambers Westgarth. One client says that "when I need help Henry Davis York is my safe pair of hands, when I'm in trouble or when I want something tended on correctly".

The firm's regulatory practice was busy advising a banking syndicate valued over A$1 billion ($1.1 billion) on the examinations being conducted by the administrator after it obtained funding from International Monetary Fund (IMF). Other highlights included assisting the banking syndicate and receivers on the ongoing Australian Securities and Investments Commissions (ASIC) investigations, including examinations into the collapse of ABC Learning Centres.

One client commends the banking team at Baker & McKenzie as "commercial, pragmatic, smart and proactive", suggesting that "they know our business probably as well as I do".

In terms of transactions, a highlight saw the firm advising Kohlberg Kravis Roberts (KKR) as a stakeholder in the Seven Media Group (SMG) on the implications under SMG's senior and subordinated facilities arising from the sale of its stake in SMG to West Australian Newspapers Holdings (WAN) for A$4.085 billion ($4.4 billion).

Clients are quick to praise Norton Rose: "Their advice is very reliable and we complete a lot of work together and they are always making themselves available regardless of the time and responsive turnaround," one says.

Last year the team advised a bank syndicate led by Australia and New Zealand Bank, HSBC Group and Rabobank on the financing facilities granted to Wilmar International, to fund the acquisition of Australian sugar producers Sucrogen from CSR a leading building products company. The combined loan facilities were approximately $1.9 billion separated into two loans of $1.3 billion and $600 million. The first loan was used entirely to finance the acquisition of Sucrogen while the second loan was used for the purpose of the acquisition and working capital requirements.

Johnson Winter & Slattery is the principal finance advisers to Envestra, Abacus Property Group, Gerard Lighting Group, SEA Gas and OneSteel. Other finance clients include Australand Holdings and Cochlear.

"We find the turnaround time to our inquiries and instruction is very quick. It is proactive in proposing practical legal solutions and has kept abreast of key legislative changes", comments a client.

Last year the firm acted for the Gerard Lighting Group in negotiation with its bank to restructure the Group and implement a A$127 million ($137 million) refinancing facility for the purpose of the group's IPO.

With head of finance Bill Chapman leading the team, DLA Piper advised Westpac on the bank's first social and affordable housing facility for a non-profit entity.

The quality of the team's work is recognised by clients: "as we have a long standing association with the firm and are entirely comfortable with the professional and pro-activity of the partners and support staff."