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

The project finance market saw a return of confidence in 2010/11 as a number of the legacies of the global financial crisis were gradually removed. "Although the market has clearly not returned to the pre-global financial crisis levels, renewed confidence and stability and a steady pipeline of transactions led to a fairly buoyant year," says a leading partner.

Last year also proved to be significant for the evolution of the Australian public-private partnership (PPP) market. "Project finance is in a lot better condition than it was two to three years ago," says a partner.

Most of the work has been born out of a number of key projects. Led by the successful closure of the Peninsula Link project in Victoria, each of the Federal Governments (through Single LEAP 2): Western Australia (Mundaring Water Treatment Plant); South Australia (New Royal Adelaide Hospital); Victoria (Ararat Prison and the Victorian Comprehensive Cancer Centre); Queensland (Gold Coast Rapid Transit); and the Northern Territory (Northern Territory New Secure Facilities Prison) have promoted the PPP model to deliver key infrastructure projects.

In addition the New Zealand Government (through the Wiri Prison) has also now embraced the PPP Model.

"The enthusiasm for investments in natural resource and related infrastructure projects showed no sign of waning last year," says a lawyer. Investment to support a number of LNG (Liquified Natural Gas) projects in northern Australia and investment in port and rail infrastructure to support a number of mining projects "will continue for the foreseeable future," the lawyer continued. One interesting development in this area will be the potential growth of these significant and expensive projects.

With the country needing to "develop a strategic blueprint for infrastructure", says a law firm partner, the government has committed A$3.2 billion ($3.3 billion), the largest chunk of its initial round of funding from the Building Australia Fund, to Melbourne's regional rail link. This project will see new track built from Werribee in the city's outer southwest to the edge of the Central Business District, thus removing regional rail services from crowded suburban tracks.

Allens Arthur Robinson is "still a pillar to project financing in the Australian market," says a client. "In my experience, Allens Arthur Robinson outperforms most other firms and has a greater depth of expertise and experience servicing all sides of a transaction including sponsors, governments, contractors and financiers," adds a client.

Partners Philip Cornwell and Diccon Loxton lead the team and last year they advised Q Port Holdings (QPH), a consortium comprising four of the largest infrastructure investors in the world, on its A$2.3 billion ($2.5 billion) successful bid for the 99-year lease of the Port of Brisbane.

Q Port Holdings includes major stakeholders Global Infrastructure Partners, Industry Funds Management and funds managed by QIC, as well as a minority stake held by Tawreed Investments, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.

This sale delivers A$2.1 billion in cash proceeds to the Consolidated Fund, as well as allowing the new owner to agree to fund the future upgrade of Section 3 of the Port of Brisbane Motorway at an estimated cost of A$200 million.

As well as removing the burden of cost from the taxpayer, investor participation in this project demonstrates faith in the economic development of the Australian Trade Coast precinct, of which the Port of Brisbane is a key component.

Freehills project finance team has a broad range of experience advising both sponsors and lenders. One client says of the team: "They have been able to add the extra value a client wants from a law firm by their complete understanding of our company's strategic and commercial objectives."

Partners Brendan Quinn, Erin Wakelin and David Walton are highly thought of by clients: "Each of the partners I have dealt with has been legally extremely competent."

Last year saw the team advised the financers of the Southern Way Consortium which was selected as the successful bidder for the A$759 million ($818 million) Peninsula Link. This major project involves the construction of a 27 km of freeway standard road, joining the existing Mornington Peninsula Freeway.

Another project saw Freehills advising the financers in relation to the A$742 million refinancing of the Hazelwood Power Station and Mine. As a brown coal fired power station (and the highest CO2 emitter of the power assets in Australia), the refinancing faced significant hurdles and challenges particularly in the context of the current lack of certainty arising from the absence of a settled emissions trading scheme in Australia.

Late 2010, the team also advised the sponsors, Transurban, QIC and Intoll, on the refinancing of one tranche of their existing debt in respect of the Westlink M7 motorway in Sydney. The refinancing involved raising A$505 million of debt and amending and restating the terms of the debt financing.

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 legacy firm Mallesons "is the best firm in project finance as far as I am concerned", according to one client. With its involvement in some of the country's biggest deals in last year, the firm retains its tier one ranking.

"They provide really good people who know the market and are not afraid to provide the cutting edge ideas to new project finance business," says a client.

Partners Jeff Clark and Peter Doyle both "highly rated lawyers", says one rival partner, "and are still the standard bearers at Mallesons when it comes to project financing".

Alex Regan, "an up and comer" according to one peer, is acting on a power project in Vietnam with the sale of the Abbot Point Coal Terminal, a significant port and rail project.

The team acted for the financiers to the winning Consortium (Industry Funds Management, Queensland Investment Corporation and Global Infrastructure Partners) and acquired a 99-year lease over the Port.

The sale delivered A$2.1 billion ($2.3 billion) in cash proceeds to the Consolidated Fund as well as the Consortium agreeing to fund the future upgrade of Section 3 of the Port of Brisbane Motorway, at an estimated cost of A$200 million.

Other notable highlights include advising on the financing of the Karara Iron Ore project. Mallesons conducted legal due diligence on the project, advising and assisting with obtaining Foreign Investment Review Board clearance for the State of the Environment lenders.

Clayton Utz "certainly ranks in the top one to two tiers in the market here", according to one client, "I recommend them and characterise them as absolutely top-notch."

In a significant boost to its project finance capability, Bruce Cooper, a senior project finance partner and former head of the banking and finance practice group at Freshfields in Asia, joined the practice last year. With the addition peers say that "Clayton Utz can expect significant project financing transactions across the globe".

The team advised Peninsula Link in the Availability PPP (public-private partnership), under which the private sector will finance, build, design, operate and maintain the road for the agreed project term. Clayton Utz covered all legal aspects of the project, including strategic and commercial advice on the delivery method, a first for PPP road projects in Australia.

Clayton Utz also advised one of the bidders on a project to design, build and operate the Western Australian-based facility which will be developed as a PPP.

Another notable highlight was acting for the Government of Singapore Investment Corporation (GIC) as mezzanine financier of a A$230 million ($248 million) facility to Epic Energy's South West Queensland Pipeline Expansion Project. It also marked the first time GIC had invested in an Australian project in a mezzanine finance capacity.

Minter Ellison "is a standout law firm in the region. The project finance team's intellect and skills of all their lawyers are first rated. The practitioners work seamlessly across practice areas and between different partners and lawyers", says a client.

According to clients, the firm is "a leading firm with good specialist experience", and clients are happy to use them because "instead of focusing on the black-letter law, the team has the ability to provide advice that incorporates a deep understanding of the client's objectives."

Fred Tinsley, the national head of Minter Ellison's project finance division is "an exceptional lawyer that provides excellent advice and manages difficult situations very well," says a client. Considered one of Australia's pre -eminent advisors in PPP (public-private partnership), a rival partner comments: "I've worked with Fred on the otherside of a PPP deal and his knowledge is very strong." Paul Paxton is also recognised as "another highly rated practitioner".

One of the highlights for the firm was the syndicated debt project finance commitments for consortium's shortlisted bid for Western Australian Government's Mundaring water treatment plant PPP project. This is the first of a number of projects to be procured using PPP procurement methodology in Western Australia.

Kenneth Gray heads Baker & McKenzie's project finance team, that has the capability to advise Australian and international corporate borrowers, banks and other financial institutions. "We think the people in the project finance area always in control of issues and we find them to be very commercially knowledgeable," says a client.

Last year saw the team act as US and Australian counsel to Kangaroo Resources on its $15 million convertible bond offer. The money was raised from US and Australian investors through convertible notes and used to provide funding to ramp up production and exploration at the Mamahak Indonesian Coking Coal Project and to advance exploration in other key properties.

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 team has developed a particular expertise in advising on the legal issues arising from the development, including regulatory approvals, financing and operation of bulk commodity export terminals.

Clients have been fond of the team's ability to draw "a combination of leading partners across multiple disciplines and the ability for all of their expertise to be accessed". The same client says: "individually they've been exceptional and collectively they work extremely well in providing the comprehensive solution."

In the past year the firm has seen the departure of Jeremy King to Corrs Chambers Westgarth. The team however rebuilt through the hire of Simon Irvine from Clayton Utz.

Last year one highlight was serving as lead Australian adviser to the WICET Group in relation to the A$3 billion ($3.2 billion) development and financing of a new coal export terminal at Golding Point in the Port of Gladstone.

The Gilbert + Tobin project finance team led by John Schembri has been receiving rave reviews for being "very knowledgeable, very experienced and willing to come up with ideas that may be outside the box". Another satisfied client added: "I find that they're very crisp and organised and professional. They have an approach which reflects client interest first, so they work from a client's position and utility."

Last year saw the team advising the financers and drafting all of the financing documents in relation to the A$3.75 billion ($4 billion) proposed bid by Queensland Coal Industry Rail Group (QCIRG) for certain QR National assets.

Norton Rose has two well respected partners Dan Marjanovic at the Sydney office and Alen Pazin from the Perth office. Last year the team also welcomed the addition of Herman Yip from Jones Day.

The team was praised by clients: "Their advice is very reliable and they're always making themselves available regardless of the time," says one.

A notable highlight for the team was advising China Development Bank and Export Import Bank of China on the $500 million project financing for Moly Mines in connection with the development of the Spinifex Ridge molybdenum.

The Allen & Overy project finance team has settled very quickly in Australia and was advising the Independent State of Papua New Guinea and various State participants in connection with the establishment of its participation in the PNG LNG (liquefied natural gas) project.

Another highlight was advising Magellan Petroleum Corporation's wholly owned subsidiary, Magellan Petroleum Australia in their acquisition of Santos Limited's 40% interest in Evans Shoal.