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

Capital markets have recently seen a recovery, and even in the relatively slow Czech market, there are encouraging signs, although the crisis in Greece slightly curtailed this. Now with the demand for funds increasing attention has switched to the capital markets.

Practitioners have also noted a move towards more exotic products as the market matures: "People are working on products like securitisations. The mere fact of this after two-three years of relative quietness says something," notes one partner. This is seen across the CEE (Central & Eastern Europe) region as state and state-owned corporates look to the capital markets for finance. Many projects, for example, include a project bond element in the financing package and the market expects to see an increasing amount of this form of activity over the next two to three years. "The bond market dominates the capital markets," says one partner. "We will see higher activity in the next 12 months in debt," agrees another partner, adding: "It's definitely more active than equity, which is in line with the global economy. Some of the issuers are in financial trouble and so we'll see a lot of work around it." The market has also seen some activity with regard to Eurobond issues.

The equity market in contrast remains quiet. "The Czech republic has never been very active in the equity market. There are only a small number of companies listed but there will be more activity," says one partner. This means that in relative terms, equity is picking up. "Realistically, two or three IPOs would be a significant leap forward," the same partner says, adding: "There will never be tens of IPOs in Czech in a year".

Such activity manifests itself in the excitement which has surrounded the prospective listing of CSOB on the Prague Stock Exchange (PSE). Partly due to the volatile markets, this listing has stalled and its owner, KBC Bank, has yet to decide whether it will float 30 or 40% of CSOB. Nevertheless, it is the largest planned IPO ever in the Czech Republic.

One rare entry onto the PSE this year was the listing of Fortuna Entertainment Group at €78 Million. This was the first IPO in the Czech Republic since 2008 and one of only two listings on the PSE in 2010. There is also a trend for Czech companies to list elsewhere, with AVG Technologies and solar energy company Photon Energy expressing interest to list on the Warsaw Stock Exchange.

There is little doubt among market commentators that White & Case is naturally placed as a market leader. However, some peers have questioned whether it should exclusively occupy the top tier with one saying: "They're not completely ahead of the pack." Nevertheless, client feedback highlights the requisite cutting edge for the top flight with one emphasising: "They're the only firm in the Czech Republic with English law and US law capabilities in Prague, and of course Czech law."

Partner Michal Dlouhy, who is active in the firm's most high-profile transactions, is singled out for praise and described as a "top player".

Clients are full of praise for the firm, noting its sound technical ability and "high concentration levels". When compared with other firms on the market, one client stated: "There have been strong points with others but they were the most professional in every element covering the widest range of products." There were some concerns raised as to pricing but this was partially offset by the firm being considered "approachable in price negotiations".

Over the last year, White & Case have demonstrated its equity & debt capabilities on the chief deals on the market. The firm still acts for Belgium's KBC bank and its local subsidiary CSOB on the largest planned IPO in the Czech Republic (since 2008).

In another testament to its innovation the firm represented Ceská sporitelna in the issue of €82 million of floating rate municipal bonds in Liberec. Apart from being secured by a mortgage over the issuer's real estate, this was the first ever issue of bonds secured by a sinking fund in the Czech Republic. The firm also helped introduce the placement of German notes into the market. This development is set to increase competition (thus far, notes are listed under Czech and English law). White & Case also have a mandate for the European Federation of Energy Traders (EFET). It acts for EFET in preparing the netting and collateral opinion in respect of the EFET General Agreements used for the trading of electricity, gas and emissions allowances.

Since 2004, the firm has acted as the only transactional counsel on the EMTN programme of the Czech Republic. Since 2007, the firm acted for the arranger in connection with the establishment, all updates and increases of the €3 billion EMTN programme of the Czech Export Bank. The firm's high profile clientele include Deutsche Bank, JPMorgan, Merrill Lynch, BNP Paribas and Morgan Stanley and Ceská sporitelna.

"They are highly capable', says one client. Allen & Overy retain its position in the second tier after another solid year. Though some peers expressed uncertainty over the firm's pedigree in the Czech Republic's capital markets, clients were in no doubt as to the quality of advice received. The firm has not been so visible on the transactional advisory front. However, it has been quite active in policy advisory.

Václav Valvoda, Petr Vybíral and Robert Pavlu have been drawn out for praise with Václav being "known for a relatively long time and held in high esteem". If there is anything which has caused dissatisfaction it is the rate for the services rendered. But as one client says: "Clients will always complain about the price but the service is good."

The firm still advises its enduring client Czech Export Bank (CEB) in connection with the updating of its €3 billion EMTN programme and the various issues of fixed and floating notes contained within. The team also assists CEB with negotiations for schedules to Isda master agreements and credit support annexes. Led by Václav Valvoda, the firm advised the joint lead managers with a €750 million notes issue (due in 2025) by CEZ and assisted the Joint Dealer Managers on CEZ's buy-back and exchange of the outstanding notes for, and the issue of, new €250 million notes (due in 2020). Furthermore, it advised Komer_ní banka with an analysis of the potential impact Czech law might have on the enforceability of an English law governed Isda master agreement (including credit support annex) entered into by two Czech counterparties. The firm also still advises Isda with preparation of a new law on financial collateral and close-out netting.

"They have extensive international presence. Their library is infinite and they have everything at their disposal in any part of the world," says one client, alluding to the depth of knowledge possessed by Allen & Overy.

Baker & McKenzie has built on its solid Czech base this year moving up to tier two. The firm is steadily building market share as it finds creative ways to garner momentum. "They're not so strong in debt, but a lot better in equity now," says one partner.

Although some believe that the firm's competitiveness has been won through their flexibility on fees, few doubted the team's ability to get deals done. "They tend to focus on smaller IPOs but did the Fortuna IPO," says one partner, adding, "They have lots of visibility."

Co-head of the capital markets department Tomas Skoumal has been active on a number of high profile deals including the €78 million IPO of the Fortuna Entertainment Group, which was dual-listed on the Prague and Warsaw Stock Exchanges. This was the first IPO in the country since 1998 and one of only two listings on the Prague Stock Exchange in 2010. The firm also acted on the Polish, UK and Dutch aspects.

Another highlight saw the team act for a major German financial institution with matters related to bonds issued by Sazka (the largest Czech lottery company currently involved in the largest insolvency case in the last year). Moreover, the firm is still advising CSOB and KCB bank on what has the potential to be the largest European IPO of 2011.

Clifford Chance holds on to its second tier position despite reports of decreased visibility from market commentators. "We do work with them, but for British firms, the work is carried out in London. They're heavily dependent on London," says one partner. However, the firm's well-established network is of benefit to foreign investors as the offices in Central Europe are proficient when it comes to sharing knowledge. The Prague office provides multi-lingual support for clients and is adept at advising on multi-jurisdictional matters.

On the transactional front, in derivatives, the firm has a very strong niche specialisation in the area of emissions trading. It has been advising the Czech State (since 2009) on all its trades in assigned amount units (AAU) within the framework of the Kyoto protocol. The proceeds of these trades are then used within the Czech Green Investment Scheme. The value of these trades so far stands at €700 million. Furthermore, such trades have made the Czech Republic the biggest AAU-selling nation in terms of volume traded. The firm has also been active for HSBC and Citibank Europe in connection with sales of consumer loans portfolios.

Flying the flag for the domestic quarter, PRK Partners reinforces its position in the second tier and the firm is respected by clients and peers alike. Renowned for its aptitude in capital markets work across a broad spectrum of activity, the firm is engaged as local counsel for a host of high profile UK and US firms including Slaughter and May and Freshfields Bruckhaus Deringer.

Evidence of the firm's proficiency on the debt side comes in the form of advice to Crédit Agricole Corporate and Investment Bank as the arranger of Cetelem's €410 million debt issuance program (guaranteed by BNP Paribas). The firm also represented Ceská sporitelna as the lead manager of €205 million in municipal notes issued by the city of Prague.

The team also represented Ceskoslovenská obchodní banka as the lead manager of €82 million notes of Ceské dráhy (a leading Czech railway logistic group) and the Czech Banking Association in connection with the preparation of a model product annex for emissions allowances relating to the model Czech Master Agreement (based on the European Master Agreement) and the development of such a contract in Czech and English. Such advice includes adjustments for foreign exchange transactions, updating legal opinions on contracts and quarterly monitoring of documentation validity and legal opinions.

The firm's clientele is notable and also includes the European Investment Bank, ING Bank, Komercní banka, New World Resources, RBS and UniCredit.

Martin Aschenbrenner (Leading lawyer bio)

"BBH do good capital markets work," says one competitor. The firm was active in the debt capital markets through 2011 and in one deal advised the lead manager at PPF Banka on Home Credit's €119 million zero-coupon bond issue (a unique private bond issue in 2010, one of a very few successfully issued and listed on the Prague Stock Exchange). The firm also acted for Volksbank (as arranger) on Levade's €3 billion debt issuance programme.

CMS Cameron McKenna's strong European coverage allows the firm to manage, coordinate and work on complex cross-border capital markets work through local lawyers. Over the last year the firm advised a global investment bank in connection with derivative transactions and acted for a club of banks in regard to ISDA compliant and Czech law based hedging agreements in connection with a potential PPP (public-private partnership) project in the Czech Republic.

Glatzova & Co continues to build a presence in the capital markets and lead partner Dana Schweigelová was this year named as an arbiter of the Prague Stock Exchange's (PSE) permanent arbitration court by the PSE Exchange Chamber (the highest executive body of the PSE).

Martin Dan_i_in is a driving force on the transactional side and last year advised Deutsche Bank in connection with the issue of €1 billion of 7.5% senior secured notes due in 2017 by Conti Gummi Finance. Furthermore, the firm advised Citigroup Global Markets and RBS in connection with the issue of €625 million of 6.5% senior secured notes due in 2016, and €625 million of 7% senior secured notes due in 2018 by Conti Gummi Finance.

In its endeavour to convert its capital markets practice from a small borrower focused practice to a larger more diversified one, Havel Holásek & Partners is expanding its co-operation with locally active clients and pursuing new ones. It helped Cetelem establish a five year guaranteed MTN programme of up to €400 million with a first drawdown under the programme of up to €60 million. On the non-transactional side, the firm has been advising the likes of Atlantik, ING Bank and Newton Management.

Kinstellar enters the rankings for the first time this year after strong recommendations. Contrary to popular belief, the firm does not have exclusive referral arrangements with any firm and has developed close relationships with a number of "best friend" firms with no direct presence in Eastern Europe.

The firm is described by one competitor as a "stable" player. It has been particularly active in the debt capital markets, advising Hyundai Motor Manufacturing Czech as international bond issuer on all the Czech law aspects of a €20 million bond issue. The team also advised SAZKA on a €200 million bond restructuring, the largest ever in the Czech Republic. It also acted for ECM Real Estate Investments on the restructuring of its Euro and Czech bond issues valued at over €130 million.

Led by Petr Kasik, Kocián Solc Balastík provides advice on policy formation and regulation to the Czech Capital Market Association. Last year the firm also secured some notable transactional work and advised Ontex Global Group on the Czech aspects of the €50 million refinancing of its existing credit facilities along with the Group's first bond offering consisting of €675 million in senior secured notes and €250 million senior notes. The firm has also been advising CSOB investment group and asset management along with OVB Allfinanz.

A key client for Weil Gotshal & Manges is energy company CEZ and last year the firm represented the company in connection with the exchange and tender offer for €1.4 billion of 4.6%, 5.1% and 4.1% notes due in 2011, 2012 and 2013 respectively. Additionally the firm advised CEZ on two €500 million issues of 4.5% and 3.6% notes due in 2016 and 2020 under the company's EMTN programme.

Weil Gotshal also continues to provide legal services to Franklin Templeton Investment Funds in connection with the public distribution of shares in the Czech Republic.

Driven by Daniel Weinhold and Vera Filkuková, Weinhold Legal has strengthened its co-operation with key client Ceská sporitelna. The firm assisted its client as the issuer and arranger on its €41 million structured bond issue due in 2014 under its new debt issuance programme. The firm also advised the company as issuer and arranger on another €352 million bond issue.