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

Although Canada's conservative fiscal policies and regulatory regime shielded it from most of the fallout created by the sub-prime crisis, bank lending lagged in the years following 2008. This was down to a general lack of liquidity in the global market and continuing uncertainty. As one partner says: "Here people stopped lending just because they didn't know where things were going."

Canada was one of the first of the G7 countries to embrace the new Basel III regulations. In February 2011, the Office of the Superintendent of Financial Institutions (OSFI) issued its implementation plan. One partner concludes that ultimately, "Canada's regulatory response has made it stronger."

However, there is consensus that deals got done faster before the crisis, when "there was less paper and fewer covenants". Although both lenders and acquirers are thinking more carefully and increasing the level of their due diligence in deals under the new regime, the general response has been positive. "We're getting back to an established post-turndown standard of what the market is," comments one lawyer.

Another attorney paints a more robust picture. "Banks are climbing over each other to let money out the door," he says. "All of our financial institutions are telling us business is open - they're looking to float assets, arrange deals. M&A financing is back, private equity is strong, the loan books of Canadian banks are in a pretty good space."

Two sectors that have relied heavily on bank lending in 2010 and 2011 are infrastructure - particularly the construction of hospitals, roads, bridges, and renewable power - and financial services.

Acquisition financing, specifically in the natural resources sector, has also increased as companies look to recapitalise their portfolios to allow distributions. In addition, corporate loans are picking up.

So although Basel III has, as one attorney puts it, "complicated the whole universe of banking", it has also generated business for law firms as banks look for ways to convert their existing capital to the new requirements.

In July 2010, further complications were introduced by the US Dodd-Frank Act, which brings sweeping changes to the United States' financial regulatory system. This primarily affects Canadian companies listed on US exchanges, but also affects Canadian companies that are in any way regulated by the SEC. It has created business for Canadian law firms as international banks make the transition and Canadian companies look to limit their exposure to potential SEC investigation.

One possible threat to lending is a decision from the Ontario Court of Appeal in Re Indalex. In the spring of 2011, the Court ruled, in effect, that beneficiaries of a pension plan with a solvency deficit can take precedence over ranking securities interests. The concern is that this will have a profound effect on the availability of funds, as well as dramatically change the way restructuring is done.

Blake Cassels & Graydon's financial services group has built a powerful reputation among competitors and clients alike, including numerous domestic and foreign financial institutions and commercial and consumer finance companies. Blake draws on its strong relationships with federal, provincial and industry regulatory authorities to provide advice on financial services regulations.

Regarding its top-tier ranking, one peer notes, "They're there because of value." A client adds, "They know where the law's at and where the law's going. They know who to speak to. They're good at proposing workable solutions."

One clear deal highlight last year saw partner Peter MacGowan advise Biovail Pharmaceuticals on $2.75 billion of credit facilities in connection with its merger with Valeant Pharmaceuticals, bringing together two of the largest pharmaceutical companies in North America.

In 2010, Blakes also advised The Bank of Nova Scotia on financing in connection with the $1.9 billion hostile bid by Canadian-headquartered convenience store operator Couche-Tard. The bid was for a strategic acquisition of 1500 Casey's General Stores in the US, which would have made Couche-Tard one of the nation's major convenience store owners. The Bank of Nova Scotia was one of a syndicate of 11 Canadian and international financial institutions that entered into a credit agreement with Couche-Tarde. The institutions subsequently agreed to provide a maximum of $1.5 billion in financing following a four-year term loan facility.

It was one in one out in the BLG finance department last year with Joanne Foot leaving for Miller Thompson in November 2010 and Carlo Vairo joining from Cassels Brock & Blackwell in April 2011.

Leading the team is partner Ken Atlas and he had a role last year advising the lenders in regard to $390 million in term and revolving facilities granted to Gateway Casinos and Entertainment. He also advised another set of lenders including the Royal Bank of Canada on the refinancing of the Dollarama Group. This consisted of $600 million in credit facilities including a $525 set term facility and a $75 million revolving facility.

One long-term client, who works primarily with partners Ken Atlas and Jeremy Bolger, describes them as, "responsive, available, thorough".

More lender side mandates were to follow and Howard Silverman took the lead as the firm acted for a syndicate including Canadian Imperial Bank of Commerce and The Bank of Nova Scotia on a $250 million bridge facility granted to the Noranda Operating Trust.

The firm's regulatory team led by Rebecca Chan was slightly reduced in December 2010 when partner Ron Bozzer left for Hungerford Tomyn Lawrenson and Nichols. The department is focused on providing advice on the regulatory aspects of M&A transactions. Examples include advice to Elavon and Elavon Canada on their acquisition of another credit card provider. Similar advice was given to Bank of New York Mellon as it acquired wealth advisory firm 13 Advisors.

The Davies Ward team led by Carol Pennycook maintains a good mix of both bank and company side mandates.

In the former category, highlights included acting for the Canadian Imperial Bank of Commerce in regard to a $300 million credit facility provided to HudBay Minerals and Hudson Bay Mining and Smelting.

On the company side, one of the largest mandates was a $1.85 billion refinancing in which the team acted for the Onex Corporation. The deal also required advice on a $150 million loan for Onex subsidiary Carestream Health. Clestica also called in the team to advise it on a $450 million loan and revolving credit facility agreement with its lenders.

Leading lawyers_

Scott Hyman_

Carol Pennycook_

Jay Swartz

Praise from competitors and clients and an impressive roster of deals has led Fasken Martineau up a tier in the latest rankings. One long-term client, who deals primarily with Robert McDowell, co-chair of Fasken's financial institutions and services group, says, "Whatever your scale is, put them at the top. They're brilliant, spectacular, tremendous knowledge, quick to respond."

Another client praises the firm's technical expertise and describes McDowell as "a superior lawyer". While clients acknowledge that the firm's services are not cheap, they describe its fees as "competitive for Toronto".

In a $1.2 billion multi-jurisdictional deal that closed in March 2011, Partners John Torrey, Thomas Meagher and David Ferris advised a syndicate of lenders led by Scotia Capital in the financing of Kinross Gold and its subsidiaries in Brazil, Chile, Canada and the US.

In another high-profile deal, Partners John Torrey, Brian Wright and Marc Novello acted on behalf of Toronto-Dominion Bank, Bank of Montréal and Royal Bank of Canada as co-lead arrangers, in the $2 billion financing of Bell Canada's acquisition of CTV. It was one of Canada's largest bank financing transactions in 2010.

Fasken Martineau also advised Desjardins Credit Union on its merger with Meridian Credit Union to create the largest credit union amalgamation in history, with combined assets of $8 billion. The deal closed in June 2011.

The financial services group is led by Ross Walker and the focus is on bank side mandates.

Toronto based Peter Murphy was one of the firm's busiest partners and last year he acted for JPMorgan Chase as the head of a syndicate which provided a $1.23 billion financing to Quad/Graphics for its purchase of World Colour Press. Murphy also advised HSBC Canada on a $200 million financing provided to a major accounting firm.

On another $1 billion + deal, Murphy worked alongside Charles Rich in providing advice to Bank of Montreal on a $1.275 billion loan to a major oil and gas company.

Under department head Jean Anderson, Goodman's banking, finance and regulatory practice has being making good progress recently, with competitors noting that the firm has "stepped up the bond holding game" and that it "pioneered the income trust". Clients were also impressed: "A great understanding of business," says one customer, "They always have the answer."

In June 2010 the firm advised Aleris International as it emerged from bankruptcy to become a private company. As a private entity, Aleris is majority-owned by its creditors, led by investment funds managed by Oaktree Capital Management, affiliates of Apollo Management and Sankaty Advisors. The funds agreed to invest nearly C$700 million ($729 million) in the reorganised company through a combination of a rights offering and new equity. Aleris simultaneously entered into a $500 million multi-currency revolving asset-based lending credit facility from Bank of America to provide working capital liquidity and letters of credit.

Goodmans also advised Wells Fargo Capital Finance as administrative agent, co-collateral agency and lead lender in a $832 million secured revolving asset-based loan facility for Sears Canada.

McCarthy's banking and finance practice maintains its tier one ranking, partly based on the strong relationships it has built with all six of Canada's big banks: Royal, TD, CIBC, Scotia, BMO, and National.

In a deal that closed in December 2010, Stephen Furlan led the McCarthy team representing a syndicate of lenders led by The Toronto-Dominion Bank and co-arranged by Toronto-Dominion and Canadian Imperial Bank of Commerce in the creation of a new credit facility for the Aecon Group, Aecon Construction and Materials, Aecon Construction Group and Miwel Construction. The facility, valued at $312 million, was to be used for working capital and general corporate requirements.

Toronto Dominion also called on the firm to advise it as the administrative agent in refinancing a $535 million term and revolving facilities for the second largest casino operator in Canada. The transaction, with Gateway Casinos & Entertainments, included a new $406 million senior secured credit agreement providing Gateway with term and revolving facilities.

McMillan's merger last year with Lang Michener has greatly enhanced its financial services practice with six new partners joining the team. Robert Cranston, Douglas Pedlow, John Morrison, David Thring, Eric Friedman and Graham Mattehws all join the expanded team.

Lender side mandates were very much the order of the day for the firm and in one example the team acted for Royal Bank of Canada as agent and lender of an acquisition finance facility made available to Niagara Acquisition for the C$2 billion ($1.9 billion) purchase of a real estate portfolio from ING Summit Industrial Fund.

The firm also picked up two major refinancings. In one the team acted for Deutsche Bank New York and the bank's Canadian branch as the administrative agents on the refinancing of a $1.8 billion asset based revolving credit facility and a $1.6 billion loan to the Hertz Corporation and Hertz Equipment Rental. In the second, a substantial group from the firm acted for The Bank of Nova Scotia as the administrative agent for a syndicate of senior lenders on the refinancing of Canwest Media's $300 million loan and Canwest Limited's $1.3 billion loan in connection with the sale of the latter's Postmedia Network.

Norton Rose will from next year see its headcount boosted significantly as it incorporates MacLeod Dixon as part of its second merger in the country in the last year. In June 2011, the UK firm entered the country through its first tie-up with Ogilvy Renault and it is the bulk of this team that forms the main part of the firm's finance offering.

Even before the initial merger there was a fair deal of movement at the firm with partners Chantal Morillon and Sanjay Joshi joining the team from Langlois Kronström Desjardins and WeirFoulds respectively, while George Maughan and Merie-Anne Beavis departed in early 2011.

Ogilvy's and now Norton's focus is on bank side mandates whether it be underwriter, arranger or other roles. Examples last year included advising the Royal Bank of Canada as co-lead arranger and administrative and syndication agent in regard to the amendment and restatement of a $200 million senior secured asset based revolving credit facility for Gibson Energy. In a similar deal Suzana Lobo and Andrew Pritchard advised JPMorgan Chase in its role as administrative agent and collateral agent on the $1.45 billion credit facilities provided to Cedar Fair, Magnum Management and the Wonderland Company.

Another substantial deal saw Kevin Morley, David Amato, Arnold Cohen and Serge Levy advising Bank of America on a $1.1 billion credit facility for the financing of Michael's Stores.

The regulatory team led by Marc Duquette also had a busy year. One key mandate was advising the Canadian Bankers Association in connection with the implementation of covered bond legislation. Andrew Fleming, Eric Reither, Mario Forte, Karen Galpern, Peter Noble all acted on the deal.

Although the banking and finance group at Osler Hoskin & Harcourt's is respected in the market, competitors note that it doesn't "quite have the depth of financing," as the tier one firms.

In terms of transactions, last year the firm advised Shoppers Drug Mart in a $781 million amended and restated revolving term credit facility maturing in 2014, in a deal that closed in December 2010. The firm also represented Goldman Sachs Lending Partners as lead arranger and agent in connection with senior secured credit facilities provided to Valeant Pharmaceuticals for its merger with Biovail.

In March 2011, Osler acted for JPMorgan, Citibank and Bank of America in Canada in connection with a $312 billion facility with Ally Bank, Ally Financial and Ally Credit Canada, secured by retail, lease and wholesale financial assets.

Over the past year, Osler counselled members of the Canadian Bankers Association, on matters including the 2011 Bank Act amendments and amendments to Bank Act security provisions, and on court appearances relating to the proposed Canadian Securities Act. The firm also provided advice on appearing before the Competition Tribunal in an intervention in the Commissioner of Competition's application which alleged that Visa and MasterCard's rules for credit cards infringe the Competition Act.

Stikeman Elliott was the first Canadian law firm to open offices in London, New York and Australia, and one of the few practices in Canada that has expertise in all four of the country's major financial centres - Toronto, Montreal, Calgary and Vancouver.

In one of the largest deals of 2010, Stikeman Elliott served as Canadian counsel to the lender Morgan Stanley Senior Funding on a $2.7 billion secured acquisition financing to Walter Energy for a takeover bid of Western Coal. The strategic acquisition was made in response to the growing demand for coking coal from Chinese steelmakers.

In one of the largest refinancing transactions in Canada in 2010, Stikeman also advised Teck Resources on its amended and restated credit facilities and a subsequent bond issue. These transactions, for one of Canada's most prominent natural resource companies, began in 2009 and had an aggregate value of approximately $8 billion.

Over the past year, the firm has also advised on Basel III and Dodd-Frank compliance obligations for Canadian and international banks.

The Torys bank lending team's headcount was increased in March 2011 when Kevin Fougere joined the team from Blake Cassels & Graydon.

One of the largest deals acted on by the firm saw department head Adam Delean acting for Novelis on a $4.8 billion refinancing consisting of a $1.5 billion loan, an $800 million asset based revolving credit facility and a $2.5 billion high-yield offering.

One banking client says that Delean is "always accessible", even when travelling. "He provides good advice and knows the difference between business and legal points," she says.

Another substantial deal saw the team advise Viterra on its $1.6 billion revolving credit facility made up of Australian and Canadian tranches.

Delean also advised the Canada Post Corporation as it gained C$400 ($388 million) million in credit facilities from Toronto-Dominion Bank and Royal Bank of Canada. This was done in conjunction with two public debt issues worth over $1 billion, which the firm also advised on.

On the regulatory side, the firm was mainly involved acting on the regulatory aspectsof M&A deals. Blair Keefe leads the team and deal examples last year included advising Sun Life Assurance and Sun Life Financial on an agreement to sell its life reinsurance business to Berkshire Hathaway Life and acting for TD Bank Financial Group on its acquisition of the South Financial Group.