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

After the global financial crisis left many international banks lacking liquidity, Chinese banks have bucked this trend and are seeking new ways of investing their capital. As one partner notes, "the financial crisis was a shift in Asia because suddenly Chinese banks were the only ones with capital, and they wanted to spend it even when all of the international banks weren't lending."

This has led to China-related banking and finance growing in prominence this year with a substantial amount of outbound M&A finance and project finance work coming out of China. Inbound acquisition financing remains a strong source of work for international firms, but it does not seem to be growing at the same rate as outbound has been. "Outbound financing is the big story this year," says one partner. "Chinese companies aren't just looking to make the same old acquisitions anymore. They want technology, patents and trademarks and the PRC (People's Republic of China) banks can and will finance them in acquiring targets." Chinese companies have continued to make outbound acquisitions in a number of sectors that are historically of interest, such as oil and gas, mining and natural resources, and manufacturing. However companies also do 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 luxury goods sector is certainly increasing. Given these developments, banking and finance practices in Hong Kong must have strong relationships with Chinese banks and investors in order to remain competitive in the market.

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.

For example, in 2010 Sinosure provided an export credit facility guarantee for five leading Chinese bank lenders in the financing for India's $1 billion Sasan power project. The Sinosure-backed project financing represented the largest ever financing of an Indian project by Chinese lenders. The Baha Mar luxury resort development, slated to be the largest ever in the Bahamas, also represents a case of Chinese lenders following Chinese companies overseas as the project is being developed by a Chinese contractor and financed by the Import-Export Bank of China.

Financing work originating from liquid banks in other Southeast jurisdictions is also becoming increasingly popular with firm's advising on syndicate deals coming from right 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.

During 2010 and early 2011, Allen & Overy's China banking practice has advised on a number of highly-complex deals including pre-IPO financings, asset finance, real estate finance, and Chinese inbound and outbound investments. The firm maintains a strong client list of Chinese and international banks. "Allen & Overy has a very strong franchise in syndicated loans," one client says, "They are a very well established firm and we have a longstanding, traditional relationship with them."

Partners Joseph Tse and Yvonne Ho recently advised lenders in seven separate bilateral loan facilities to Sinopec Century Bright, a Sinopec-incorporated Hong Kong company. Each bilateral facility was to be used in relation to Sinopec's acquisition of 9% of the shares of Canadian-based crude oil extractor Syncrude Canada limited.

Allen & Overy's team also advised HSBC as the lender in financing provided for SAIC Motor HK Investment as it sought to buy a 0.97% state in General Motors Company at the time it was listed on the New York Stock Exchange. The $850 million loan was significant because the high-profile investment by a Chinese car manufacturer into the US market included heavy negotiations with the SAIC group so as to ensure the security of the investors.

Clifford Chance's bank landing practice has two of the most important features necessary for maintaining prominence in the Hong Kong market-close relationships with international financial institutions, and longstanding relationships with regional financial entities that finance international transactions. One partner at a rival firm notes that, "Clifford Chance is one of the largest and best teams in Hong Kong. Their relationships with the top international banks and major Chinese banks in Hong Kong make them a go-to firm for advising on syndicated loan transactions."

Partner Andrew Hutchins brings deep experience in a range of banking matters including syndicated lending work and cross-border leveraged deals to the Hong Kong team. Experienced partner Anthony Wang lends his background in syndicated loans, acquisition financing and project work to the group.

The banking partners at Clifford Chance recently acted for a syndicate of Chinese lenders leading the financing of the landmark ultra megawatt power project in Sasan, India. The syndicate of banks for the $1 billion project includes Bank of China, The Export-Import Bank of China and China Development Bank. CC also advised lenders in relation to a $400 million acquisition finance facility for the funds-based leveraged acquisition by funds by CVC Asia Pacific and Standard Chartered Private Equity of and Acument's Global Technologies' Avdel and Global Electronics & Commercial business units. Clifford Chance's Hong Kong team advised CVC Asia and Standard Chartered PE on English and Hong Kong law.

Linklaters' banking and finance practice continues to be a leader among its peers because of the firm's high quality, experienced partners and regional coverage. Clients consistently comment on the firm's banking abilities and capacity for ingenuity. Partner and co-head of the firm's Asia Pacific Banking and Restructuring Group Trevor Clark also gets special praise for his capabilities. "We rate Trevor Clark's team very highly," one client comments, "their technical skills are excellent. They are highly approachable, high quality people. Linklaters are the people who are highly innovative in finding solutions to problems. They have people who are senior, experienced and at the top of their game."

Clients also praise the firm's responsiveness. "Linklaters are at the top, but they're still extra value for money," one client says. "They are always available, worthwhile and they always respond quickly."

Linklaters' place in the market is also underscored by their impressive deal list this past year. Recently, partner David Irvine led the innovative Project Halo deal. This 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. Linklaters advised Merril Lynch, Goldman Sachs, Nomura International 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 particular combination of loan and bond offering seemed to ease investors' minds during the turbulent time of the Japanese earthquake. The deal also joined a European-style covenant structure with China covenant accommodation, marking the deal as unique and innovative in attracting a different mix of investor sets.

In August 2010, Linklaters also acted for the arrangers in the $200 million financing of the leveraged acquisition of Acument's Global Technologies' Advel and Global Electronics and commercial business units. The transaction was especially notable for being one of a small number of acquisition financings to have closed in Asia last year, with the exception of Australia. The Acument deal involved innovative debt pushdown techniques to maximize recourse to assets in jurisdictions without upstream security.

Clients have special praise for Baker & McKenzie's competency and accessibility. One client says that "their level of knowledge and expertise are good and up to date when it comes to the legal and regulatory changes in China, which is where the majority of our business is derived from. We have easy access to different levels in the firm when we need to get clarifications on issues that arise. Their relationship with our clients is there, and we get good feedback about them".

Partners Andrew Lockhart and Barry Cheng are co-heads of Baker's Greater China Banking practice. Together with the mainland China teams, Baker's Hong Kong team works on the full range of banking capabilities for cross-border Chinese deals, and work in other parts of Asia. Baker's Hong Kong team also has a unique place in the market in that they do many deals within Hong Kong itself.

For example, partner Stephen Eno recently advised Standard Chartered Bank (Hong Kong) in connection with a $400 million term loan facility to Wealthy Joy and Follow International. The transaction involved 16 syndicate members, and was structured to accommodate the growing trend for companies with real estate investment to tap resources in the Hong Kong market because of the tightening of credit approval by Chinese banks.

Baker also continues to advise Disney on a Chinese joint venture for the development of Shanghai Disney. Bakers' work with the entertainment giant is ongoing, and has involved advising the company on capital structure arrangements for the new Shanghai theme park. The joint venture between the government-backed holding company and Disney has represented one of the most significant foreign investment projects into China in terms of deal value and capital investment by the parties involved. Advising Disney on the venture has involved developing complex structures to address the needs of the investors in the context of Chinese regulations and the seminal nature of the project. Barry Cheng has been the lead partner on the project.

Freshfields' is already known for having a capable banking team that can handle anything from bilateral to syndicated loans and beyond, the Hong Kong office and Greater China team was augmented this year by the addition of experienced banking partner Howard Lam from Linklaters. Lam brings his experience in project finance, banking, cross-border debt restructuring and complex financing as increased M&A activity has spurred market growth in the need for intricate financings in Greater China.

The firm's global relationships with top banks gives the team access to a range of banking mandates. One example saw the Hong Kong team advise HSBC as the lender in a $135 million term loan facility to Zhen Hua engineering. Zhen Hua is a subsidiary of China Communications Construction group, and the loan was used to finance a share acquisition in Friede Goldman United.

In 2011, the Freshfields banking team also advised Nomura International (Hong Kong) in its role as borrower for a $275 million revolving credit facility arranged by HSBC, Standard Chartered and ANZ.

Banking practice head Gary Hamp leads Hogan Lovells' banking and finance 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. "We're looking to do a lot more business with them. Hogan Lovells came up in ranking order quite fast and wasn't on our radar just a few years ago," says one client, "They are extremely responsive. A number of partners I have dealt with just delegate work to their associates, but I don't get that feeling at all at [Hogan] Lovells. They try way harder since they are smaller than the magic circle firms."

Along these lines, clients seem pleased with the firm's development in the past few years. "I would definitely put Hogan Lovells towards the top of the 'knowledge tree', both at the partner and senior associate level," says one, "what I appreciate about Hogan Lovells is the investment that they have made in people who have a broad range of experiences-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."

Another client adds that, "I would say they are without a shadow of a doubt the best in the market. On broadly similar topics the quality and speed of advice, their ability to reduce advice in a way that bankers can digest, means that they outstrip their competition. They provide highly practical and commercial advice for clients. They are innovative in China, are more than prepared to think outside the box and understand non-conventional new lending opportunities outside of Asia, bespoke advice. They're great guys to have on your side."

This past year, Hogan Lovells advised Petroleos de Venezuela (PDVSA) and the Venezuelan ministry of finance on two loan facilities from China Development Bank (CDB) valued at over $20 billion total. The loan included negotiations and sales contracts governed by three different legal jurisdictions, and the Hogan Lovells Greater China team advised on Chinese law. The financing represents the largest ever made in Latin America by a Chinese bank and the biggest investment ever made by CDB.

Another important transaction this past year was the CITIC Bank International acquisition financing for the take-private delisting of the Tongjitang Chinese medical company by Tonson International, a Cayman Islands exempted company controlled by Fosun International and Hanmax Investmen. The Hogan Lovells team was led by Gary Hamp and senior associate Jenny Yim, who acted as the New York and Hong Kong law counsel to the lender and advised on Hong Kong Law, Nyse Regulatory Issues and Chinese law. The first-of-its kind deal was the seminal take-private transaction effected under the Cayman Islands merger statute.

Latham & Watkins has a strong banking practice, especially when it comes to project finance arrangements for the firm's work across Southeast Asia. Clients seem especially pleased with the firm's service and ability to handle their banking needs.

"I think the firm has outstanding knowledge. Not only are they professional, but they know how to negotiate with the counterparty and be reasonable," says one client. "They're innovative in that they're able to do non-typical loans. They can work 24 hours a day, around the clock."

In a recent example of the intertwined nature of the firm's banking and project finance practices, partners Joe Bevash and Stephen McWilliams recently represented lenders in relation to the financing for the development of the power and mining facilities components of the Hongsa Mine-Mouth Power Project in Lao PDR. This loan represented one of the largest ever raised solely on the Thai bank market, and one of the largest ever power projects attempted in Asia outside of India.

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 firm has carved out a unique place in the Hong Kong market. While many of the firm's early clients came as a result of the firm's strong Australia ties, Mallesons has kept those relationships but also expanded their client base to high-profile international clients across Asia.

The team is consistently praised by clients for offering magic circle quality within a client-centered and well-priced practice. "Mallesons was able to provide expertise on structured loan products, not just plain vanilla products," notes one client. "The lawyers we have used were generally very responsive and were able to provide prompt responses to our enquires and requests. Their strength lied in the fact that their services were City firm standard but they charged less than City firms."

Clients also have special praise for banking partner Steven Christopher. One client tells us that, "He was very knowledgeable and hands on, and he was able to think outside of the box and come up with innovative and practical solutions. He was a good negotiator and didn't get bogged down with counterparties on less important points."

The firm's banking team recently assisted a syndicate of banks that offered $1 billion of funding for France's Casino group's the successful bid for all of the Thai properties of the Carrefour retail chain. The firm has also continued to grow alongside the development of rising regional player Australia New Zealand bank (ANZ), and has been involved in a broad range ANZ's product development. The firm's top-rated structured products team has also given them a significant foothold in helping major financial institutions set up funding programs for new Rmb-denominated products.

Norton Rose's Hong Kong banking and finance lawyers benefit from its range across the region as well as its longstanding relationship with state-backed Chinese financial entities. In 2010, they advised clients like Citigroup, Credit Agricole, ICBC, HSBC and Bank of China on high-level syndicated loans.

One client describes their experience with Norton Rose by saying: "They're a strong practice. We use them for structured finance projects and cross border transactions, and they're adaptive."

As an example, partner Davide Barzilai recently advised Bank of China on a secured loan facility of up to $180.5 million for financing one LNG (liquefied natural gas) vessel needed for the transportation of LNG from loading facilities in Bintulu, Malaysia to the LNG terminal and trunk line project receiving facilities in Shanghai.

Partner Chris Redden's led in aiding a syndicate of 20 banks in lending a $5 billion term loan to the Sinopec Group last year. Redden also advised 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 China.

Paul Hastings' well-known strength in the real estate sector across Greater China has allowed the practice to grow through strong real-estate banking mandates. Brett King, who heads the Hong Kong and China banking group for the firm alongside Patricia Tan Openshaw is respected by peers: "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."

Recently, the team advised ING Bank, Taipei Fubon Commercial Bank, and Chinatrust Commercial bank in the IK Investment Partners' acquisition of the Offshore Incorporations Group. The group of companies provides services from the Carlyle Group and covers matters such as company formation.

Through 2010, the Paul Hastings team has continued to advise various Lehman Brothers bodies in the sale and liquidation of their real estate assets in Asia. The firm's work in this regard has been multi-jurisdictional, spanning Southeast Asia from the Philippines to Japan.

One of White & Case's main assets in its greater China banking and finance practice is its ongoing relationship with and advising of China Development Bank (CDB). The relationship has led to growth in the form of a number of new associate hires in both Hong Kong and Beijing who can support the bilingual and China-focused nature of the greater China practice.

The relationship is well known in the market, and has led to a deal list that is making other firms take notice. One peer says that, "White and Case has developed a very solid practice through their relationship with CDB, and they have grown and expanded their banking team this past year." This strong relationship does not mean, however, that White & Case's banking and finance practice is limited to CDB work. Indeed, the firm seems to be actively broadening its client base while maintaining the CBD stronghold.

This past year, partners John Hartley and Baldwin Cheng represented Deutsche Bank, Hong Kong Branch, Macquarie Capital (Singapore), UBS (Hong Kong Branch) and DBS Bank as both joint mandated lead arrangers and joint mandated bookrunners in financing for MMI Precision Technologies in its acquisition of Intri-Plex Technologies. As White and Case had previously advised a lending syndicate on a credit facility to MMI international, where Kohlberg Kravis and Roberts (KKR) led the sponsor group, the firm was tapped to represent the new syndicate in the $75 million financing because of its strong KKR relationship.

The White & Case team also has a strong real-estate side, as exemplified by Balwin Cheng's recent leadership on separate financings for Hong Kong-listed developer Agile Property. The loans included a HK$1.92 billion ($246 million) and HK$1.55 billion syndicated loans from Standard Chartered Bank. Because the financings to Agile were given in conjunction with ongoing high-yield note issuances the deal involved complicated negotiations between the banks and Agile over intercreditor issues.

DLA Piper's banking and finance team seems to have grown this past year, with the firm earning several major mandates that cannot be overlooked. Partner Martin David leads the Asia-wide practice, which includes Hong Kong practice leader Paul Lee and recently promoted partner Jolyon Ellwood-Russell.

In 2010, partner Paul Lee advised Modern Terminals Limited on an HK$4 billion ($526 million) syndicated term loan and revolving credit facility. Lee also led a team that advised leading Chinese property company SOHO China on its first offshore syndicated loan, valued at $4 million

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 firm's historical strength in project finance means that much of Herbert Smith's work is related to this sector, although the firm's large capital markets practice means that the team is also competent in supporting clients on pre-IPO financings for Chinese and other energy companies looking to list in Hong Kong. Herbert Smith's Hong Kong, Beijing and Shanghai offices work in conjunction to serve their clients in the Greater China region.

Herbert Smith's confidential banking clients include working with a number of leading Chinese banks on telecom, mining and power projects.

One of Mayer Brown JSM's most important differentiations in the market is the firm's strong relationships with the Hong Kong branches of international banks and local Hong Kong and Chinese clients. The firm's critical mass of bi-lingual and dual qualified partners and associates means that Mayer Brown JSM is well equipped to serve the needs of these clients. These aspects also mean that the firm is well placed to benefit from the new trend of Rmb-denominated loans coming out of Hong Kong.

"They're very knowledgeable, very experienced and very flexible," says one client. "They are good in cases related to China exposure, of Hong Kong companies related to Chinese companies. They have been very innovative."

Recently, the Mayer Brown JSM banking team represented Hang Seng Bank in Hong Kong's first ever Rmb-syndicated loan, advising the bank on its role as mandated and coordinated arranger. The value of the multi-currency loan facility for large integrated solutions railway signalling provider China Automation Group was US$50 million, and the offering was highly oversubscribed.

Sidley Austin's Hong Kong and Greater China banking practice supports its funds and complex Financing work across the region. This past year, Sidley advised several major property companies and Chinese corporations and issuers on credit facilities and financing transactions.

Sidley's team has done a significant amount of real estate financing work this year, with partner Robert Mason leading Sidley's team in advising Agile Property Holdings on existing loans. These included a HK$800 million ($103 million) facility, a HK$1.55 billion bilateral loan and an HK$1.6 billion syndicated facility. Sidley's partners have also advised on a number of other loans to companies in China's real estate sector.