Debt Issues and Structured Finance

Bond market is booming, more complicated products mired in regulations

For both investment-grade and high-yield bonds, the first half of 2017 went extremely well. While classic bonds were already red hot in 2016, the start of the year saw a notable market upturn for high-yield bonds.

The derivatives market continued to be defined by regulatory requirements. EMIR, MIFID II and MIFIR in particular made it necessary for financial institutions to initiate extensive measures in order to satisfy the new requirements.

Market leaders remain intact, centerfield has a new face

The departure of a respected partner from Clifford Chance to Dentons attracted a great deal of attention in the market. With another Clifford Chance lawyer and a partner from Baker & McKenzie, the largest law firm in the world has thus made waves in structured finance as well, establishing a good position for itself in the midfield.

However, this has not yet caused the well-established firms to feel threatened. The market leaders in particular remain unaffected. Several have taken advantage of the good business outlook to prepare for the next generation: Freshfields Bruckhaus Deringer and Linklaters, for instance, have admitted younger lawyers in this area into the partnership.

In bonds, the market leaders have distinguished themselves with aplomb through innovative products: for instance, Freshfields Bruckhaus Deringer made an appearance advising on synthetic convertible and warrant bonds in high volumes for prominent companies such as BASF and Fresenius. Sullivan & Cromwell has also firmly established itself on the market, and was involved in two billion-euro transactions at the same time, namely the issues of Bayer and Deutsche Telekom. If not quite travelling in the same circles, CMS Hasche Sigle has nevertheless managed to position itself in the debt segment with considerable business.

 

This subchapter deals with practice areas within debt capital and structured finance (securitizations, derivatives, distressed loans). The two segments occasionally overlap, as the boundaries between some debt products and structured finance are blurred. Clients are often advised on both practice fields by one firm. However, only a few firms operate in both fields with the same intensity, and they usually have separate teams in each. There are therefore separate tables for debt issues and structured finance.