High yield
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The high yield debt market was virtually silent for the second half of 2008 and early 2009. Mandates arising from primary issuance, a basic measure of the activity of leading practices in prior years, have given way to roles handling the restructuring of high yield bonds and bridge financing.
Uncertainty surrounds the future state of this market, if and when it reopens. However very few firms have reduced their high yield capability in London, and the ranking reflects the degree to which it has been difficult for firms to make their mark on this space as they continue to adapt their capital market practices for the coming years. Of particular note is the expectation that European corporate bond issuers will be crucial participants as the product returns, and relationships here continue to be at the core of many firms’ strategies.
Following Bryant Edwards’ relocation to Dubai in 2008, Latham & Watkins has been looking to up-and-coming corporate finance partners, such as the ‘intelligent and alert’ Brett Cassidy, to continue to take up the mantle alongside ‘true high yield expert’ Richard Trobman. Corporate partner Tracy Edmonson’s arrival from the San Francisco office is regarded as a strong move for a practice that benefits from relationships with a mix of large issuers and underwriters, such as JPMorgan and Morgan Stanley.
Philip Boeckman at Cravath, Swaine & Moore LLP is ‘among a very small band of brilliant lawyers who know this area inside out’ and is ‘consistently capable of delivering in tight time frames and with minimal fuss’. The group has strong ties with international banks, including Citigroup and Credit Suisse, and a history of acting on high-profile manager-side mandates.
The pairing of Jacques McChesney and Ward McKimm at Shearman & Sterling LLP continues to grow as a force in the market. Both are ‘incredibly thorough lawyers’ and ‘more than capable of pulling off labyrinthine transactions’. The group’s links to banks which have remained relatively active - Barclays and Citigroup for example - puts it in a strong position for when high yield issuances re-emerge.
Simpson Thacher & Bartlett LLP is recognised as ‘one of the top high yield practices in London’, although it faces the challenge of filling the void left by Walt Looney’s return to New York in 2007 and adapting to a market in which its traditional base of sponsor clients may not be the source of high yield deals it once was. Key to the practice’s progress has been the appointment to partner of Nick Shaw, a ‘highly thought of’ lawyer with a focus on high yield.
Rachel Hatfield - White & Case LLP’s former high yield practice head - has left the firm, but it nevertheless maintains its grip on a swathe of European issuers such as Weather/Orascom and Mid Europa. ‘Very effective and quick off the mark’, the team, headed by ‘precise and intelligent’ partner Rob Matthews, continues to draw on its emerging markets practice as a significant source of issuance mandates.
High yield work has been one of the core focuses of Cahill Gordon & Reindel’s London practice and in managing partner Jim Robinson it has one of the ‘leading underwriter practitioners in Europe’. In 2009, the team represented a group of banks as joint lead managers in closing a US$860m offering of high yield bonds for Fresenius, the only offering of its kind in the market at that time.
Under the leadership of ‘convincing and hard-working’ partner Sarah Murphy, Freshfields Bruckhaus Deringer LLP’s practice rises in the ranking this year. With a client base rich in European issuers, the practice is ‘commercial’, ‘reliable’ and well positioned to continue to grow its profile in the area. The team recently won a key role advising the issuers in Fresenius’ high yield offering.
Cecil Quillen and Alexander Naidenov at Linklaters LLP remain the key partners for a practice that draws leverage off the firm’s standing in the emerging markets. The practice’s previous involvement in acquisition finance in these markets and the depth of resources in the firm’s restructuring practice continue to present opportunities for the group to build its name.
Skadden, Arps, Slate, Meagher & Flom (UK) LLP has valuable experience in the busy emerging markets, and has the potential to continue to generate a lot of high yield work from leverage finance activity in Russia, for example. Adrian Deitz has relocated to the firm’s Sydney office, but the ability of a number of its London capital markets lawyers to perform on high yield deals keeps the practice in a strong position.
‘Highly experienced at giving practical, well-structured advice’, Weil, Gotshal & Manges provides high yield expertise as part of a six-partner capital markets practice with connections to a host of underwriters. The firm has drawn on its prowess in restructuring to advise bondholders in handling high yield credits, such as working on SkyePharma’s £90m high yield convertible bonds. Peter Schwartz has ‘excellent product knowledge’ and James Cole is notable for his emerging markets experience.
US-qualified partner Bart Capeci remains a key figure to the high yield component of Allen & Overy LLP’s sophisticated capital markets practice.
Baker & McKenzie LLP combines relationships with high yield issuers across the European markets, such as ISS, Mauser and Altima Partners, with experience in the form of partner Thomas Philipp, who is ‘first choice for managing difficult issues’.
‘A very good capital markets firm’, Cleary Gottlieb Steen & Hamilton LLP has high yield capability in London in the form of Pierre-Marie Boury and Glen Scarcliffe.
At Clifford Chance, high yield specialist Michael Dakin and US securities head John Connolly look set to continue the firm’s push to increase its reputation for acting on complex, US-style financings.
Milbank, Tweed, Hadley & McCloy LLP has ties to JPMorgan, Goldman Sachs, though progress in this market will depend on its response to high yield specialist Kevin Muzilla leaving the firm in early 2009.