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

There is a consensus among Austrian firms that the banking market has stabilised since the beginning of 2011. "The general opinion is that most of the write-offs have been done this year [2011]," states one partner. The position of nationalised bank Hypo Group Alpe-Adria, however, remains unclear with many unsure whether it will survive: "I'm quite sure that they can't repay so they will have to be broken up or at least that's the perception of the market at the moment." says one partner.

Consolidation has begun for the banks that have to repay government subsidies received during the crisis. Volksbanken, Austria's fourth largest bank, which actually posted a small profit in 2010, put its 51% stake in Volksbank International, a lender with operations in nine countries in Central and Eastern Europe (CEE), up for sale in December 2010. Russian banks are reputedly interested, eager to gain a foothold in Eastern Europe where Austrian banks prevail.

Refinancing transactions still dominate, but in 2011 less of these deals were crisis driven and fresh financings are more common. "Acquisition financing is coming back [and] leveraged financing is coming back and [these are] the areas I expect most business for in 2011," says one. Large syndicated loans and club deals involving more than four banks have started to return in the last 12 months. Austrian banks, however, only have the appetite for good assets, exemplified by the huge interest shown when electricity supplier Verbund announced its capital increase.

Lawyers are benefiting from clients' cautiousness. "Everything is done more carefully, takes more time and is reflected on ten times. You can see it in the volume of the transactions we are advising on. Before the crisis we had deals in excess of €200 million now we are doing a fully-fledged documentation for €50 million," says one partner.

On the legislative side, stamp duty, a major point of contention for Austria, was abolished in January 2011. "It was really a hassle," says one lawyer. "A lot of transactions were structured just to avoid the stamp duty and without taking into account the real issues. To have the best possible security agreement was often just the second priority." Although duty still applies to some security agreements, for 90% of transactions it is no longer applicable.

Project finance has never been big business in Austria but with the opening of the country's oft-delayed first road PPP (public-private partnership) project, the A5, in spring and the awarding of the contract for the second, the B4 Maissau by-pass, in July, there is hope that these projects could stimulate this sluggish area.

There is no doubt in the market that Binder Grösswang deserves its place in the top tier. The banking practice is highly regarded among peers: "They are one of the only firms in Austria that has banking regulatory know-how," says one partner, who is particularly impressed by property finance partner Tibor Fabian. "If it comes to hardcore legal questions, I very often turn to him," says one client.

The firm advised on several new money financings, private equity deals and a PPP (public-private partnership) project, in addition to refinancing work prompted by the crisis.

The team acted for lenders in two notable private equity transactions, with Stefan Tiefenthaler advising UniCredit on the financing of private equity house Triton's €175 million acquisition of Wittur Group, a lift component supplier, in November 2010. Emanuel Welten also assisted the lenders in the €850 million acquisition of Takko group by private equity house Apax Partners.

The team won borrower side mandates with Tiefenthaler advising Lenzing, a textile manufacturer, on acquisition financing of a 75% share purchase in Czech pulp producer Biocel Paskov.

Elsewhere Tiefenthaler advised a banking syndicate including Erste Group Bank, Raiffeisenlandesbank and UniCredit, on a share purchase in electricity company Verbund.

In July 2010 the firm represented the banks in connection with the €80 million Maissau Bypass PPP project. The road project was the only one of its kind to be awarded in the country last year and there is hope that it will stimulate PPP activity.

Also on the projects side the firm advised a utility company on the financing of the construction of a new CCGT (combined cycle gas turbine) power plant in Toul, France.

Market perception is that Freshfields' banking team is focussed on financing rather than regulatory work and in this respect the firm has been active in regard to bank bailouts.

Competitors speak highly of Fredrich Jergitch: "A good lawyer, easy to work with and he knows what he's talking about," says one. "No doubt it is excellent quality that you get there," says another peer.

One of the firm's key clients is UniCredit Bank Austria, which Maria Pflügl recently advised on a €160 million club loan for construction company Alpine Bau in order to refinance an existing club facility guaranteed by the Republic of Austria. It was the first company to benefit from the state guarantee scheme twice. Pflügl also advised the bank alongside Raiffeisenlandesbanks on the €650 million financing and refinancing of a purchase of participation rights by Unicredit from private equity house B&C Holding.

In February 2011, ING engaged the team on a $206 million secured forward start financing to RCS & RDS, a Romanian telecommunications group. The facility was designed to partially forward start an existing facility, permitting new lenders to join financing while allowing existing ones to lend more.

On the borrower side, one of the team's biggest deals saw it advise Nufarm, a pesticide manufacturer, on the creation of a security package for a $900 million facility agreement, requiring validity in nine European countries. The firm also advised AMAG on a €200 million facility agreement in March 2011 ahead of its IPO.

In another notable transaction, Counsel Attila K Csongrady advised Deutsche Bank on a $200 million secured structured financing for a financial institution counterparty in the CIS (Commonwealth of Independent States). The transaction involved Deutsche providing financing to the counterparty via an SPV (special purpose vehicle) against bonds held in Euroclear, a bond settlement provider, and a portfolio of locally originated loans.

The departure of partner Markus Bennes to IFLR1000 debutants Eisnberger Herzog provoked a mixed response from competitors. "They have a really large banking group; it should not affect them too much," was one lawyer's perspective, but others, insisted Bennes was a key figure present on many deals.

Despite the loss, the firm still boasts one the country's largest banking practices and offers a degree of talent equal to its size. Markus Heidinger and Claus Schneider are the partners consistently mentioned by competitors with name partner Richard Wolf noted for his important relationships with the banks. Clients commend the team for being responsive, reliable and fast in regard to deal turnaround.

A significant amount of the firm's recent work has a real estate focus. One deal saw the firm advise Matrix Real Estate on the restructuring of an existing financing arrangement with now bankrupt Lehman Brothers in regard to the €200 million sale of IZD Tower, the largest office block in Vienna.

On one transaction which was yet to close at the time of writing, the firm led by Andreas Schmid was advising Erste Group Bank on the financing of a hotel in Belgrade by Austrian developer Soravia. In order to comply with Serbian National Bank rules several subsidiaries of Soravia will have to be restructured with capital increases in Serbia and Austria.

In a deal which involved the firm's M&A department, Schmid and Wolf advised Barclays Capital on the €80 million financing of Conwert Immobilien's acquisition of listed ECO Business Immobilien.

Another notable mandate saw Wolf close a deal for Austrian payment services provider Paysafecard.com in May 2010, which granted them the only current pay services licence in Austria.

The market is uncertain about Cerha Hempel's banking practice and there is a consensus amongst competitors that the team's workload has diminished noticeably since the crisis. Discussing tier two, one partner says: "Cerha is the one firm that has not such a permanent presence. I see them rarely on the other side when it comes to financings."

However the team do also receive plaudits: "Cerha are a fine address for banking law," insists one lawyer, adding, "The department is headed by Hlawati, but Peter Knobl really knows a lot about regulatory work and has published a lot in this regard."

Knobl has exercised his regulatory expertise on two notable transactions recently. In one – born out of Volkswagen's €3.3 billion merger with Porsche Salzburg – Knobl advised Qatar Investment Authority in January 2011 on the notification requirements to exercise the put option held with Porsche, who were transferring some subsidiaries to Volkswagen. As part of the deal the firm convinced the Austrian Regulator to apply new notification procedures. He has also provided advice to Econgas on the Austrian Securities Act.

On the transactional side partners Clemens Hasenauer and Johannes Prinz acted in one of the largest financings ever obtained by an Austrian corporate group acting for OMV Finance on a €1.5 billion multicurrency loan from 16 banks for the acquisition of a controlling stake in Turkish energy supplier, Petrol Ofisi.

Partner Thomas Zivny has been active on project finance work in the CEE (Central & Eastern Europe) including advise to Bawag on the €46 million financing of four solar energy projects in the Slovak and Czech Republics. He also acted for UniCredit bank Austria on the refinancing of a €150 million project for three major shopping centres in Slovenia, the first time a Slovenian mortgage was granted inclusion into a pool of covered bank bonds.

In other notable work, Volker Glas advised Telekom Austria in the renegotiations of €930 million worth of financing and collateral agreements with BNP Paribas in July 2010.

"It's Tibor Varga and Andreas Zahradnik, they do a considerable amount of financings and they do a good job," is one lawyer's assessment of the banking team at Dorda Brugger Jordis. Banking regulatory and investment funds partner, Andras Zahradnik, is described by a client as "creative and reliable" and commended for having, "a clear focus on client's needs." Of Varga, a competitor says: "I like to work with him, he's uncomplicated and he's always efficient to work with."

Varga acted on all the firms' notable recent banking work including, in May 2010, advising Goldman Sachs and Barclays as underwriters of a €1.7 billion leveraged buyout facility for the acquisition of Springer, a German academic publisher, by private equity sponsors. In January 2011, with Varga again taking the lead, the firm acted for long-standing client Odebrecht Drilling Norbe, on a €900 million project finance deal arranged by HSBC and BNP Paribas, for the construction of two oil drillships. This was in conjunction with the firm's capital markets team, including Varga, who advised the subsidiary on a bond issuance to fund existing vessels.

The firm also acted as local council for developers Maiga Investments on its $320 million facility arranged by Deutsche Bank and UniCredit for a real estate project in Moscow.

There are no complaints about Schoenherr's position in the rankings. Peers say the firm has a good team which is often mandated on the borrower side, with partners Martin Ebner and Peter Feyl viewed as the key banking lawyers..

Last year Ebner advised agents and arrangers Erste Group and Vienna Insurance Group, on a €120 million club deal for the financing of a shopping mall in Romania.

One of the firm's most sizeable transactions saw Peter Feyl acting for lenders, including National Australia Bank, on the creation of a security facility under an A$900 million (€689.9 million) syndicated agreement for pesticide manufacturer Nufarm.

As the private equity market began to resurface, the firm advised German private equity house Triton on local law aspects of its €175 million acquisition of Wittur Group, a producer of elevator components.

On the restructuring side, Martin Ebner and Wolfgang Höller advised RBS, who were acting as agent for 200 senior lenders, on the local law aspects of their €2 billion restructuring of European Directories Group, €200 million of which was Austrian debt.

The banking and finance practice at CMS Reich-Rohrwig Hainz is headed by partner Gunther Hanslik, who is widely respected by competitors.

Hanslik has been predominantly active for key client UniCredit Bank Austria, advising on the financing of the Singna Group's €150 million acquisition of Vienna's largest office building (the IZD tower) and on the financing for real estate fund Invescos' purchase of five hotels in Austria and Germany from Spanish chain NH-hotel. Hanslik also advised the bank on restructuring its €150 million financing of Bulgaria's largest shopping centre development, Bulgaria Mall.

It has been more than a year since five partners left DLA Piper Weiss-Tessbach to launch boutique firm Benn-Ibler and although the firm is eager to banish the departures in February 2010 from memory, the market has not forgotten, and competitors suggest that the firm has not replaced the quality it lost.

However, the current team has been active on several new finance transactions. In one, Wolfgang Lafite advised equity investor TA Associates on the €30 million financing for the acquisition of dental reconstruction specialist, Amann Girrbach, from Austrian private equity house Alpine Equity. The firm was also active for Raiffeisenlandesbank, advising on €30 million financing of a new photovoltaic power plant at the BMW construction factory.

Competitors question how active Doralt Seist Csoklich is on transactions but do not doubt the firm's banking capability. "When you look at quality they certainly deserve to be here," was one partner's view. Peers specifically praise the firm for its banking regulatory expertise: "There are Austrian banks which rely on their advice," says one.

Consistently recommended by competitors, Fellner Wratzfeld & Partner makes its first appearance in the rankings this year. For peers, the name of the firm is synonymous with head partner Markus Fellner. A favourite of the banks, restructuring expert Fellner is often mandated on distressed cases. "They are quite narrow," was one lawyer's remark while some competitors suggest that the firm has definitely come to prominence since the crisis.

In one on-going deal, Fellner is advising Erste Bank Group on the restructuring of the €800 million financing granted to A-Tec Industries in what is Austria's third biggest bankruptcy ever. Fellner has also been active for Hypo Investment bank, refinancing real estate portfolios in Germany.