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

After the nationalised bank Hypo Real Estate (HRE) failed last summer's stress tests you can't blame its compatriots for being cautious, particularly when HRE transferred €173 billion in non-strategic assets and risk positions to its bad bank in October 2010. So banks, understandably, prepared for July's assessment vigorously, bolstering reserves with large capital increases.

Improved stability within the majority of the German institutions is being reflected in the market and things are gradually picking up. "I think the development was a positive one in the market. I think a year ago liquidity was much tighter, there was less finance around and the insecurity was very high over how things would develop," says one lawyer. Another banking partner agrees: "There is a lot of positive feeling amongst the banks about the market in general,"

In the latter half of 2010 it was a different story, refinancing was the predominate form of work and bonds had emerged as the only means of affordable financing. "The bank bond market that has developed in Germany over the last few years, it doesn't only do the refinancing, you have got it doing financing," explains one partner.

But this trend has not fully materialised. The exception being when companies need to service a large amount of debt: "When corporates have a massive amount of debt, especially on the leveraged side, that was refinanced by a various mix of bonds and loans and these bonds were typically high-yields."

All the conventional modes of financing are, however, available and transactions utilising them are becoming more prevalent: "Deal volumes are comparatively modest to what we saw in the heyday but they are going up. Leverage which banks permit is going up," says another lawyer.

Some banks are offering deals with relatively little credit protection as an incentive for hesitant borrowers: "We see aggressive structures. It's amazing. The financial crisis sometimes resulted in a grinding halt. This has changed," explains another partner.

Several lawyers confirmed that they had even heard whispers of covenant-lite loans in Germany. "I'm not sure how quick it's going to be, but I'm noticing murmurs in the market of covenant-lites, it's sort of said in the quarters here by the banks with a bit of a smirk on their face saying: 'It's never going to happen here.' We don't know. The banks are keen to make their money work for them like anyone else so they are going to have to be robust and push internally for the credit approval ratings the private equity firms are getting from other banks," explains one partner.

Another interesting development is the renaissance of the classic syndicated loan as a back-up or general purpose facility. While the economy is thriving and margins are low, lenders are taking their chances to lock in funds for longer periods: "They are looking at five year maturities rather than three to two as it has been previously because 50% of the margin has evaporated," says one partner.

"Allen & Overy has a very strong banking practice in Germany both in terms of size and in terms of quality," says one lawyer. Undisputed as a leader in the German banking field by competitors, the firm boasts a strong team of leading lawyers.

One competitor did, however, express reservations about its regulatory expertise: "So far they are not visible on the regulatory market." This weakness was recently addressed with the firm's recruitment of banking regulatory and investment funds partner Frank Herring and his team of three associates from Norton Rose's Frankfurt office in May 2011. An internal promotion for Thomas Neubaum, in the same month, further expanded the partnership.

Partners Walter Uebelhoer and Oliver Waldburg combined to advise a banking syndicate on granting a €500 million credit facility to Klöckner & Co, a German steel and metal distributor.

Another notable deal saw Neil Weiand, who a peer describes as, "more active in the conservative bank arena," advise Bayer in relation to a €3.5 billion five-year revolving credit facility. A syndicate of BNP Paribas, Deutsche Bank and RBS were mandated to arrange the facility, which refinances Bayer's existing and identical facility before it matures.

Energy companies have generated some notable work for the firm lately. Weiand advised EON in connection with a €6 billion syndicated revolving credit line while Mark Hallet was active for Commerzbank as coordinator of a €6 billion syndicated credit line for Energie Baden-Württemberg (EnBW).

Clifford Chance's Frankfurt office acts as hub for the CEE (Central & Eastern Europe) region and according to competitors it sees a lot of activity. "They are very active, they are an excellent firm," says one competitor.

Partners Bettina Steinhauer and Barbara Mayer-Trautmann are consistently singled out by peers as experienced lawyers and core members of the country's banking elite.

Acquisition financing is becoming more common and Mayer-Trautmann advised Unicredit bank on the financing for the acquisition of the CaseTech Group by holding company Equita from Industrieholding Adcuram Group in May 2011. Another deal of this kind found Mayer-Trautmann advising UniCredit and DZ Bank on the financing of the purchase of d&b audiotechnik by private equity firm Odewald & Compagnie from investor Afinum.

Refinancing work was still prevalent in the country last year. Steinhauer advised Symrise in relation to the refinancing of its existing €800 million post-IPO syndicated facility in a deal which closed in October 2010. The refinancing involved several different instruments, including the issuance of a €300 million bond by Symrise, a syndicated loan and US private placement.

Steinhauer also closed a deal in April 2011, in which she acted for a banking syndicate led by Deutsche Bank Luxembourg which negotiated a €3.5 billion revolving credit facility for German chemical and pharmaceutical company Bayer.

Partner Timothy Jefferies retired from the firm's banking and finance practice in November 2010.

Market perception of Freshfields' banking practice is mixed, with some commentators arguing that it has "fallen back". "I don't really see a strategy to invest, to expand their finance activities," says one peer. "Yorck Jetter [head of banking] went to Munich, he still has a presence on the market but with a giant like Freshfields you would expect them to make much more of their corporate wallet."

Despite the consensus that the practice is smaller than its direct rivals, there is no denying the firm's quality: "I think Freshfields is probably the only firm in tier one who is not dominating the market by size but I still think they have an excellent banking team." Jetter is continually singled out by peers as "one of the best lawyers in the country".

In one highlight Jetter advised American cable operator Liberty Global Europe on financing for its acquisition of Kabel Baden-Württemberg (KWB) from private equity investor EQT, which relied on high-yield bonds in place of bridge financing to raise €2.25 billion. Jetter has also been busy advising Hochtief on the financial ramifications of its takeover by Spanish construction group ACS, handling matters such as syndicated cash and bonding facilities, loans and global surety programmes.

Frankfurt-based Frank Laudenklos advised Commerzbank on the restructuring of an existing €650 million syndicated credit facility and loan and on a new €300 million syndicated loan for Schmolz & Bickenbach and acted for the fund management unit of JPMorgan and an affiliate of the Singapore government's real estate arm, on the financing of their acquisition of the 42-storey OpernTurm office tower (Opera Tower) in Frankfurt from UBS and Tishman Speyer.

In regulatory work, Gunnar Schuster was engaged by the German Financial Markets Stabilisation Fund (SoFFin) to advise on the transfer of loans and securities of €173 billion from Hypo Real Estate Group to FMS Wertmanagement.

Lawyers were unequivocal in their praise for Hengeler Mueller. "They have had a very good year [and] invested in the banking and finance area," says one peer, while another rival banking partner appreciates the "very partner-focussed" approach the firm brings to deals.

"Most large clients in banking rely on lawyers who are able to find a solution," says a client, adding: "Lawyers must be well versed on the legal issues and what is standard in their market. For that you need is a lot of experience and these lawyers have that."

Refinancing has been dominating the firm's work-flow. On the borrower side, the largest of the deals was for the German pharmaceutical wholesaler Phoenix, which it advised on a €2.6 billion syndicated loan, a €500 million high-yield bond and a €500 million capital increase. Partner Ralph Defren was also active for Coutinho & Ferrostaal on an extension and refinancing of its credit facility while Thomas Cron took the lead on plastic and glass manufacturer Gerresheimer's refinancing and negotiated a new €400 million long-term syndicated loan with a five-year maturity, a €150 million loan and a €250 million revolving credit facility.

On the lender side, Cron advised the banks responsible for SAP and Symrise's revolving credit facilities.

Commentators point out that the firm "does not have cross-border capabilities", however its associations with leading firms throughout Europe were showcased on the €586 million restructuring of Carl Zeiss Vision, in which Daniel Weiss led a team advising on the restructuring and setting up a joint venture with private equity house EQT. 'Best friend firm' Slaughter and May advised on the English law aspects.

The magic circle firm has a strong banking practice that has an enviably good relationship with its London office. "Another strong year. What works well there is the cooperation between Germany and London. They've got a good experienced German team here. Clearly one of the household names," says a partner of a global rival's banking practice.

Banking lawyers confirm that acquisition financing is returning in Germany and the firm has secured some notable mandates in this capacity. Julian Zaich and Björn Strehl led a team advising WestLB on the financing of a €528 million acquisition by a consortium of seven German utility companies of a 51% stake in Steag, Germany's fifth largest energy company, from Evonik Industries.

Widely recommended partner Eva Reudelhuber was active for the banks financing chemical company BASF's €700 million purchase of chemical company Cognis. Elsewhere, finance partner Michal Hlásek advised Macquarie in relation to the acquisition of the German supra-regional gas transmission network Thyssengas from the operator RWE.

Leading lawyer Mark Trinkaus meanwhile advised private equity house Apax on financing its acquisition of retailer Takko Holding from Advent International and for RWE, the DAX 30-listed German utility company, on securing a €4 billion revolving credit facility with a €2 billion equivalent US dollar and Euro swingline option.

A notable piece of refinancing work saw Trinkaus advise a syndicate on restructuring Schaeffler's outstanding debt which was reduced from €7.4 billion to €4.6 billion.

The banking practice at Milbank Tweed is considered to be extremely client focussed. "Very valued, seriously loyal and deliver on time. They work well with tight deadlines. They produce what we ask for," says a client.

"I think Milbank is definitely strong, in particular [practice head] Rainer Magold," says a peer. Magold has been active for the sponsors on two notable transactions, most recently securing €145 million in financing for The Carlyle Group's acquisition of four companies held by Primondo Specialty Group in January 2011. He also acted as lead counsel for Triton on securing €175 million to purchase the companies in 15 different jurisdictions owned by the Wittur Group in December 2010.

The same month saw one of 2010's rare leveraged finance transactions, in which Margold led a team advising the Unicredit on providing syndicated loan facilities for the acquisition of the Schneider Versand Group for €113 million.

The firm's other listed leading lawyer, Thomas Ingenhoven, is a favourite of clients, one of whom describes him as a "self-starter, very proactive, very broad". He is also praised for considering every eventuality. Another says: "[He] understands the commerciality of the deal. Very knowledgeable and diligent. He knows the business inside out. If he was to leave I would probably follow."

Ingenhoven was active on the arrangers side in late 2010, acting for UniCredit on refinancing €360 million in credit facilities extended to shipping group Hapag Lloyd and representing Commerzbank on arranging a €400 million syndicated loan for biotechnology company Sartorius Stedim.

In March 2011, Ingenhoven also advised a consortium of German municipal utility companies on financing the acquisition of Evonik Steag for €528 million.

There are murmurs amongst White & Case's rivals that although strong on leveraged finance, the firm has lost ground in recent, leaner times in which refinancing has become the mainstay for most lawyers. "My impression is that they suffered a little bit in the financial market crisis since they had a very specialised focus," says one competitor.

However, clients view the practice and its head Annica Lindegren positively: "We like them first of all for their professionalism. They are commercial, they have a very good team so you are not relying on a partner or one or two associates and they are experienced," says one. Another client values the firm's knowledge: "They have a very decent insight in to what was recently done and what is required. They have a good grasp of current market trends and term fees of facility agreements."

Lindegren is seen as the banking practice's driving force and with the market stabilising there is the sense that the firm will make a push towards the top tier again. "They had a very good run under the lead of Lindegren. They dwelled on leveraged acquisitions and the market is picking up so that will help them," says one peer.

The firm remains strong in acquistion financing. Recently Lindegren represented a consortium of nine banks coordinated by Commerzbank in relation to the financing of Triton's acquisition of Tyco Waterworks European business from its holding company. She also fronted the team advising Commerzbank, Société Générale and DZ Bank on financing British Private House Bridgepoint's acquisition of CABB.

On the refinancing side, partner Leïla Röder acted for Evonik Industries on adjusting its €1.5 billion credit line. Röder was also lead counsel for Commerzbank and ING Bank as arrangers for €160 million senior financing of the acquisition of GHD GesundHeits by IK Investment Partners.

Baker & McKenzie's office suffered a heavy blow with former head of banking Olaf Gebler's sad and untimely death. The subsequent move of Michael Foundethakis to the firm's Paris office leaves partner Oliver Socher as the most senior figure in the team.

In August 2010, Socher advised private equity house J. Hirsch & Co on the acquisition of MineWolf Systems. He also assisted Landesbank Baden-Württemberg (LBBW) in negotiating a €25 million acquisition finance agreement for a car parts company.

On the refinancing side Socher advised Xerium Technologies and its German subsidiaries on a restructuring in connection with a pre-packaged Chapter 11.

Market perception is that Gleiss Lutz, as with the other players in the market, also suffered from the dearth of new money deals. Partner Helge Kortz in particular has a strong name refinancing and restructuring and in one exemplary case advised on a comprehensive refinancing resulting in a significant sale of shares to the Mahle Group.

A significant blow was dealt to Hogan Lovell's banking practice late in 2010 when joint department head Olaf Grabowski joined Noerr in October.

Remaining lead partner Katlen Blöcker has been active across a range of transactions in the last 12 months. She acted for a group of funds advised by Parcom Deutsche Private Equity on acquisition financing for its acquisition of Westfalia-Automotive Holding and advised the Immeo Gruppe on the partial refinancing of a €207 million securitised property portfolio by Bayerische Landesbank (Bayern LB) and Berlin-Hannoversche Hypothekenbank (Berlin Hyp).

In addition to assisting the capital markets team on several notable bond issues, Shearman & Sterling's banking and finance partners Winfried Carli and Esther Jansen have finalised some significant acquisition finance work in the last 12 months. Jansen advised on a €455 million cavern portfolio by an investment fund structured by IVG Institutional Funds closed in January 2011. Another more sizeable transaction saw Jansen working in connection with the firm's New York office to advise a syndicate of banks on a €5 billion one year credit facility to Toyota Motor Credit Corporation and some of its affiliates.

In June 2010 Jansen closed an acquisition financing for Aditya Birla Group for its purchase of Columbian Chemicals, a portfolio company of One Equity Partners.

Matthias Horbach and Johannes Kremer jointly head Skadden Arps Slate Meagher & Flom's banking practice and the pair's recent work has all had a refinancing angle. The pair advised office supplier Esselte and its German subsidiaries, which include the German Esselte-Leitz group, on securing several extensions and additional credit facilities from Citibank.

On another notable deal, which closed in December 2010, the pair advised Bank of America and other lead arrangers of a $1.5 billion secured term loan credit facility and a $800 million asset-based revolving credit facility for Novelis, an aluminium products manufacturer, as part of an overall refinancing.

Kremer also advised a mezzanine fund as sole lender to an international marketing group in relation to certain enforcement measures and on a restructuring and distressed M&A matter in August 2010.

Long-standing client Deutsche Postbank Group has kept the banking and finance team at Luther occupied in the last 12 months. The firm has advised the bank on several acquisition financings in the real estate sector, financing of open-ended funds a large €100 million restructuring transaction.

The firm has also assisted new client NordLB with three acquisition financings.

The highlight role for Mayer Brown's banking practice in the last 12 months was advising Depfa Bank a subsidiary of Hypo Real Estate, which after receiving substantial state aid during the crisis had to transfer loans, structured securities and derivatives totaling about €173 billion.

The firm advised Halder on the financing of its acquisition of the majority shares of Gealan Group through a management buy-out by AXA Private Equity.

Opening in 2007, US firm Paul Hastings' German office is located in Frankfurt.

In acquisition finance the firm acted for Morgan Stanley in purchasing debt certificates issued by a German Landesbank and guaranteed by the German Federal State.

Asset financing and leasing represents an active area for the firm. Peter Smeets advised Sky Holding regarding the early termination of an aircraft lease agreement and in another deal the firm acted for a German commercial bank in the financing of two Roll-on/roll-off transport vessels through a €104 million loan.

Poached from German independent Beiten Burkhardt in January 2011, Bernhard Gemmel now heads the banking and finance practice at Salans.

Prior to Gemmels' arrival, the firm had been advising Whiteshire Debt Solutions on the restructuring of its portfolios.

Crisis driven mandates have dominated the deal-flow of Weil Gotshal & Manges.

The largest transaction the firm was involved in saw it advise listed Czech power utility CEZ on the €270 million refinancing of Mitteldeutsche Braunkohlengesellschaft, its subsidiary held jointly with Czech financial investor J&T Group.

In a further deal the firm acted on the behalf of sanitary fitting supplier Grohe, on the financing of the takeover of its subsidiary Grohe Asia.