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

China-related banking and finance has grown in prominence this year as the relative liquidity of Chinese banks has led to a large number of outbound M&A financings. Chinese companies have continued to make outbound acquisitions in a number of sectors that are historically of interest to domestic companies, such as oil and gas, mining and natural resources, and manufacturing. However companies also seem to be becoming decidedly more audacious in their outbound investments as they look to make less customary acquisitions in high-end technology, international brands and trademarks. While the traditional areas of investment still comprise the overwhelming majority of Chinese acquisitions, the rate of growth in high-end and branding sectors is certainly increasing.

Australia continues to be a key destination for outbound acquisition financing for natural resources. There has also been a high level of interest in less traditional geographic regions such as South America and Africa.

Chinese banks have also supported major investments in the project finance sector across Southeast Asia, with several seminal deals this year heralding the first time that Chinese banks have led international syndicates in project financings.

While interest in more common project sectors such as Chinese clean energy continues, Chinese banks have also led project financings for hotels, infrastructure and commercial projects in nearly every developing economy across the region.

International banks continue to lead in inbound acquisition financings, while both domestic and foreign banks play a key role in pre-IPO financings for Chinese companies.

Allen & Overy's Beijing team is led by partners Matthias Voss in and Yvonne Ho, who work in tandem with the Greater China team in Hong Kong. Voss heads the Chinese Energy Group, while Ho regularly acts for Chinese and foreign corporates and banks on inbound and outbound financings. Head of the Chinese regulatory team Jane Jiang was promoted to partner in spring 2011, and her experience with domestic and international banks adds to Allen & Overy's banking and finance capabilities in China. One client says that, "We use A&O for our bigger bank group transactions."

On of the team's key deals last year was the Sinosure Covered Mining facility, which was a $340m export credit facility by ICBC for the purchase of construction work and mining equipment from a Chinese contractor to a Russian firm. The financing was insured by Sinosure and guaranteed by the parent company of the borrower - innovative elements are the deal's seminal place as a Sinosure covered facility for a mining project in Russia and the fact that it was the first Russian mining facility without sovereign guarantee. Allen & Overy's China and Russian teams navigated difficult mining regulatory rules and local regulatory and listings rules issues in bringing the project to fruition.

Another deal saw Matthias Voss lead the team advising Sinosure on the $1billion landmark financing of the Indian UMPP Sasan power project. Bank of China, the Export-Import Bank of China, China Development Bank and Reliance Infra Projects.

Clifford Chance's banking and finance team in China is led by Shanghai and Beijing office managing partner Stephen Harder, who brings project and financing experience to the group. Bruce Schulberg brings his particular experience in project financing, commercial projects work, syndicated financing and NPL-related work to the team, having worked on finance for energy and infrastructure projects across Asia. "Clifford Chance's banking and finance work is excellent," says one client.

In one prominent example of the firm's ability to represent Chinese banks on outbound financings, the banking and finance team advised on a $157 million project loan for the construction of a Gabonese metallurgical plant in September 2010. The lead arrangers were BNP Paribas and the Industrial and Commercial Bank of China (ICBC), while the Sinosure insured loan represents Sinosure's first buyer's credit in the natural resources field in Africa. The ECA's buyer's credit benefit is from an original dual corporate and sovereign payment guarantee for up to 75% from the French Eramet, up to 25% from the Gabonese Republic. This mixture of both sovereign and corporate risk gave the deal another landmark element, as the transaction was the first Sinosure was involved in a deal with this combination of guarantees from shareholders.

"Linklaters really know their stuff when it comes to syndicated loans and top banking and finance transactions," says a peer at a rival firm, "they're really known for their knowledge base and doing quality work." Linklaters partner David Irvine led the innovative Project Halo deal, which was one of the first internationally syndicated leveraged finance deals to close in Asia in 2011 and also the first joint bank loan and high-yield bond acquisition financing to be seen the region for a long time. The team advised Merril Lynch, Goldman Sachs, Nomura and Standard Chartered bank as arrangers of the leveraged financing for the acquisition of Hyva International by Unitas Capital and NWS Holdings. The deal's combination of loan and bond offering seemed to ease investors' minds during the turbulent time of the Japanese earthquake.

Project Halo brought together European-style covenant structure with Chinese covenant accommodation, marking the deal as unique and innovative and attracting a different mix of investor sets.

Another landmark deal was the Baha Mar $3.5 million real estate financing of a casino resort in the Bahamas. Linklaters acted for the borrower in securing a loan from The Export-Import Bank of China, with Citicorp International as facility agent and offshore security agent. China State Construction Engineering will be the main construction contractor for the project, which gave Baha Mar access to China Exim. This deal may represent one of the first limited recourse project financings solely provided by Chinese lenders, and exemplifies the trend of Chinese financing led by Chinese contractor involvement in a project.

Partner Harvey Lau leads Baker & McKenzie's Shanghai branch of the banking and finance practice, which focuses on asset finance, loans and credit facilities, and structured finance. The Hong Kong and China teams both form the Greater China practice.

Two of the key China-focused mandates this year regarded advising Disney on a Chinese joint venture for the development of Shanghai Disney, and the Bank of China Head Office in a €900 million ($1.3 billion) financing to a chemical project company.

Bakers' work with Disney is ongoing, and has involved advising the company on capital structure arrangements for the new Shanghai theme park. Barry Cheng advised on the joint venture which represents one of the most significant foreign investment projects into China in terms of deal value and capital investment by the parties involved.

Cheng also led the Bank of China Head Office financing involved both refinancing and acquisition elements in a $1.3 billion financing to a chemical project company in completing a management buyout. The chemical project company owns and runs chemical manufacturing plants in Eastern Europe. Cheng's team played the novel role of preparing a funding agreement between the Chinese sponsor, onshore banks and the Agent, in order to allow the loan agreement and drawdown date to match. The deal also involved very complex financing elements at is closing, in order to synchronise the completion of the transaction.

Clients praise Baker's team for their ability to think ahead and provide the best advice for clients. "Baker is excellent," says one client. "They are always available. Their advice is quite concrete and they provide advice in areas we couldn't have anticipated."

Freshfields' integrated Hong Kong and China teams act for lenders and corporations in investment grade, sub-investment grade, and corporate financings.

In the past year the bank lending team was bolstered by the addition of banking partner Howard Lam from magic circle rival Linklaters. Lam brings his experience in project finance, banking, cross-border debt restructuring and complex financing.

In 2010, Freshfields advised borrower China Unicom on a HK$2 billion ($256 million) term loan facility, with an additional HK$8 million ($1 million) several months afterwards. In March 2011, the Greater China banking team also advised a subsidiary of Tesco, China Property Holdings (HK), on three term loans made to Chinese development sites to partially finance the construction of shopping malls in China.

Partners Andrew McGinty, Roy Zuo and Jun Wei support Hogan Lovells' banking practice on the ground in China, while practice Head Gary Hamp leads the team from Hong Kong. The past year has been marked by strong transactions for the firm, which seems to be finding good footing after the recent merger. The firm's Greater China banking group looks to focus on capitalising on its increased capacity for cross-border US and Latin America deals in the future.

Clients seem pleased with the firm's development: "I would definitely put Hogan Lovells towards the top of the "knowledge tree", both at the partner and senior associate level," says one client, "what I appreciate about Hogan Lovells is the investment that they have made in people who have a broad range of experience-especially their experience in recent innovative structures, which in turn reflects the quality of advice received. This was almost counter-cyclical; when most magic circle firms were laying off experienced lawyers, Hogan Lovells were busy beefing up their practice."

One particularly notable transaction this past year was the CITIC Bank International acquisition financing for the take-private delisting of the Tongjitang Chinese medical company. Tonson International, a Cayman Islands exempted company controlled by Fosun International and Hanmax Investment, targeted Tongjitang, a specialist pharmaceutical company that manufactures, markets, and sells modernised traditional Chinese medicine in China. The Hogan Lovells team, led by Gary Hamp and Senior associate Jenny Yim, acted as the New York and Hong Kong law counsel to the lender and advised on Hong Kong Long, Nyse Regulatory Issues and Chinese law. The deal was the first of its kind, a take-private transaction effected under the Cayman Islands merger statute.

Norton Rose's banking and finance client list is impressive having advised the likes of Citigroup, Credit Agricole, ICBC, HSBC and Bank of China on high-level syndicated loan facilities.

The banking team advised on a number of key deals last year, including partner Chris Redden's leading in aiding a syndicate of 20 banks in lending a $5 billion term loan to the Sinopec Group. Redden also led on an Islamic-compliant $13.6 million financing to GPS Chemoil, including the provision of a parent company guaranteed by Chemoil Energy, a Hong Kong registered company. Partner David Barzilai also served as counsel to lead arranger Citigroup Global Markets Asia in providing a $600 million unsecured bridge facility to China Resources Power Holdings. China Resources Power then used the financing to complete the acquisition of mining assets in the country.

Partner Peter Haslam led on the China Modern Dairy Holdings $140 million pre-IPO financing, including negotiating and commenting on the financing and re-financing facility agreements and related security documents. The Hong Kong corporate team then advised on the subsequent HK$3.47 billion ($445 million) global offering and IPO of China Modern Dairy Holdings.

"Norton Rose is great as always," says one client. "They're another great firm that understands and values long term relationships."

White & Case's China banking and finance practice has showed substantial growth this year, supported by its close relationship with client China Development Bank (CDB). The firm has recently worked with CDB on numerous high-profile deals, which speak to the strength of the Greater China banking and finance team. As one peer notes, "White & Case has developed a very solid practice through their relationship with CDB, and they have grown and expanded their banking team this past year." However, White and Case's banking practice is by no means limited to their CBD connection, as evidenced by some of the key deals this year.

Partners John Hartley and Baldwin Cheng represented Deutsche Bank, Macquarie Capital (Singapore), UBS and DBS as both joint mandated lead arrangers and joint mandated bookrunners in financing for MMI Precision Technologies to be able to acquire Intri-Plex Technologies. White & Case had previously advised a lending syndicate on a credit facility to MMI international, where KKR led the sponsor group. White & Case was tapped to represent the new syndicate in the $75 million financing based on the strength of its experience, as KKR once again led the group of sponsors.

Hartley and John Shum also led the team in advising Deutsche Bank (Hong Kong Branch) in the $260 million pre-IPO financing of Karvin, which was comprised of a term loan and warrants. They also advised Deutsche Bank, Hong Kong Branch's Trustees as agents counsel in the deal. Income from the financing will enable Karvin to expand its aluminium manufacturing capacity in China.

Herbert Smith has advised major international banks and investment firms on loans to joint ventures, international loans, and project financing across the Asia Pacific region. The Beijing and Shanghai teams work together to form the Greater China practice, which covers banking transactions across the region. The team has particular expertise in TMT, natural resources, energy, and acquisition and project finance.

Paul Hastings Janofsky & Walker's historical strength in the real estate sector has made it a strong player in banking in China. Peers have respect for partner Brett King's capabilities in particular - as a partner at a rival firm puts it: "If I were to make a list of the leading banking lawyers in Hong Kong and Greater China, Brett King would be head and shoulders above the rest. He really is in a class by himself."

In March 2011, King and Derek Roth led the Paul Hastings team in advising ING, Taipei Fubon Commercial Bank, and Chinatrust Commercial Bank in IK Investment Partners' acquisition of the Offshore Incorporations group of companies. Offshore Incorporations provides services from the Carlyle Group related to company formation, and the complex transaction involved multiple jurisdictions across the world.

In addition Shanghai partner David Blumenfeld led a team that advised the Australia and New Zealand Banking Group, CITIC Bank and Credit Agricole Corporate and Investment Bank as joint arrangers for two different loan facilities. The arrangers extended a US dollar secured loan to an offshore entity and also a US dollar secured term loan to a Chinese-owned enterprise that was entirely foreign owned. Loan proceeds were then used to refinance a Shanghai warehousing and industrial fund managed by ING Real Estate Investment. Paul Hastings had to work closely with the clients to interpret the impact and effects of Circular 50 in this transaction, as the loans required complex structure and different levels of government approval so that the loan could be extended by new foreign lenders.

Sidley Austin's Greater China banking practice supports it funds and complex financing practices. The group advised several major property companies and Chinese corporations and issuers on credit facilities and financing transactions. Partner Robert Mason led in advising Agile Property Holdings on existing loans including, including a HK$800 million ($103 million) facility, a HK$1.55 billion bilateral loan and an HK$1.6 billion syndicated facility. Mason also directed the advising of Shimao Property Holdings in relation to $440 million and HK$156 million multi-currency credit facilities. Also in the real estate sector, Sidley has advised Evergrande real estate, the Fantasia Group and Kaisa group on transactions. Mason and others have also represented Chinese businesses like including Chaoda Modern Agriculture, LDK Solar and West China cement in financing transactions.