IFLR 1000
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The legal market in Finland is generally regarded as a very stable one but over the last few years there have been a number of significant developments, which has led to more diversification at the top. Traditionally, Roschier and Hannes Snellman have been the dominant firms on the large cap cross-border deals, with the biggest teams and individuals, but this characterisation no longer fits so comfortably....

The legal market in Finland is generally regarded as a very stable one but over the last few years there have been a number of significant developments, which has led to more diversification at the top.

Traditionally, Roschier and Hannes Snellman have been the dominant firms on the large cap cross-border deals, with the biggest teams and individuals, but this characterisation no longer fits so comfortably. The two incumbents have developed strong offices in Sweden and branched out across the region, and while this has given them more weight on an international level peers argue that locally the strategy has diverted resources from Finland and other firms have been quick to step in.

Castrén & Snellman moves into tier one for capital markets and Borenius is also pushing for the top tier, especially when it comes to banking. Krogerus, traditionally a national and domestic firm with offices across the whole country, has also recently grown extensively and begun competes for the big ticket deals, most notably in M&A and banking.

There were two developments of note in 2011/2012. The first was the merger between Peltonen, Ruokonen & Itäinen Attorneys-at-law and LMR Attorneys to create Peltonen LMR, a strong mid-sized player, in September 2011. The second was the establishment of Avance, an M&A focused boutique established by some of the most senior partners from Hannes Snellman and Roschier and led above all by Ulf Henrik-Kull. A number of Finnish firms have also now established regional networks, with offices across Scandinavia, in the Baltics and in Russia.

CONTEXT AND TRENDS
Consensus is that the financing market in Finland has fluctuated a lot through 2011/2012. "A big year," says one partner, "very busy for us but then a lot of fluctuation, silent days and then very busy days, so the market is trying to find a direction"....

CONTEXT AND TRENDS

Consensus is that the financing market in Finland has fluctuated a lot through 2011/2012. "A big year," says one partner, "very busy for us but then a lot of fluctuation, silent days and then very busy days, so the market is trying to find a direction".

The market saw a few exceptional transactions, for example the sale by Vattenfall of its electricity generation and distribution business and Fortum's string of divestments. There was also some notable activity from private equity firms: 3i, Ratos and EQT.

The syndicated market was down and partners point out that banks, especially foreign entities but even some of the big regional banks, have either completely closed the door on new money financings or have at least tightened their purse strings. "Lenders have quite strict terms and in some cases negotiations take quite long and are quite difficult and it is not a process you can always expect to go smoothly," says a partner.

There were a number of syndicated loans in the market in 2011, which culminated with the €350 million syndicated facility to Sponda in November 2011 and €700 million syndicated loan to Stora Enso in December 2011, among others.

It seems there was a steady flow of refinancing and of restructuring work, even though there is disagreement among commentators on whether it had dropped off, continued steadily or intensified. Two positive trends were identified, the first in financing of energy and renewable energy and the second in the start of increased activity in shadow banking.

According to one partner there has been more in the investment grade corporate bond market and "signs of a growing shadow banking market". "Funds, or entities of a different character, investment houses of some sort, are in part coming entering the Finnish market from Sweden, which is the front runner here, with new types of financiers," says the partner, who adds that it has "not been seen much as yet but it is under discussion".

The flagship project finance deal continued to be the E18 motorway, which involves financing from the European Investment Bank (EIB) and Nordic Investment Bank.

RISING STARS

Castrén & Snellman
Jonne Järvi

Hannes Snellman
Markus Bremer
Maria Lassenius

CONTEXT AND TRENDS
Two trends dominated the capital markets. The first was the near silence in the equity markets....

CONTEXT AND TRENDS

Two trends dominated the capital markets. The first was the near silence in the equity markets. "No IPOs and only two public takeovers last year, little on the equity side," says a partner.

According to another partner the "capital markets are very thin in Finland and it is recognised as a national problem that the stock market is unattractive; there were no listings and very rare capital raisings here and there, but that's all".

And so to the second trend: a shift in interest to the debt markets and structured finance products. One partner notes an increase in: "structured funds, Ucits (Undertakings for Collective Investment in Transferable Securities) and products very similar to derivatives in terms of the yield an repayment" as well as "structured warrants and notes with either domestic or international issuers and a full prospectus drafted and passported when going cross border".

The market saw a number of firsts in these fields, namely the issue of the first ever secured bond by Sato, the first ever exchangeable bond by a Finnish issuer by Solidium and the first ever securitisation of an auto loan portfolio for Banco Santander.

There were striking exceptions to the trends however. For example the market saw its largest ever rights issue by a Finnish issuer when in March Outokumpu completed a €1 billion rights issue. The trend towards regulatory continued and on the legislative side the Securities Markets Act came into force.

MAJOR LATERAL HIRES

Dimitrios Himonas
From: Roschier
To: Retirement

MAJOR LEGISLATION CHANGES

Securities Market Act
Effective July 2012

RISING STARS

Castrén & Snellman
Juha Koponen

Hannes Snellman
Markus Bremer
Maria Lassenius

White & Case
Petri Avikainen

Krogerus
Mårten Knuts

Avance
Elisa Heinonen

CONTEXT AND TRENDS
The M&A market was quite patchy in Finland last year and a mixed picture emerges from partners. The market was buoyed by corporates with healthy balance sheets and a strong market in Russia, along with interest from Asia....

CONTEXT AND TRENDS

The M&A market was quite patchy in Finland last year and a mixed picture emerges from partners. The market was buoyed by corporates with healthy balance sheets and a strong market in Russia, along with interest from Asia. In terms of sectors, the most active seemed to be energy and power, healthcare and mining.

The largest deals in the market included Outokumpu's acquisition of and merger with ThyssenKrupp's stainless steel subsidiary Inoxium and the sale by Vattenfall of its electricity distribution and generation business. Fortum's divestment from certain assets fed the market with mandates as did transactions from large corporates such as UPM-Kymmene, which sold its packaging paper businesses in Pietarsaari and Tervasaari, and Sanoma, among others.

Partners do note that deals have a tendency to take longer: "There are a good amount of transactions going on but they will probably take a long time to complete, for example we started an auction two months ago but it is dragging," says one practitioner.

According to another lawyer: "there are a lot [of deals] in the pipeline but the clear difference to 2011 is that many of the deals are not coming about; no one can be blamed for caution because you can get a beating if the market turns". The partner adds that "it is very difficult to convince the stake holders from where we are standing that it is the right time to buy or sell".

In terms of private equity a number of the houses were active and partners note that private equity firms in general were under considerable pressure to make a move, despite unattractive prices. One of the biggest deals saw 3i and funds managed by 3i sell chemicals supplier KemFine to German company CABB, while another saw EQT Infrastructure Fund acquire Fortum Energiaratkaisut and Fortum Termest from Fortum Corporation.

Private equity was mostly about divestments however, with Nordic Capital, EQT III and Ratos all making divestments to corporates.

MAJOR LATERAL HIRES

Christoffer Charpentier
From: Hannes Snellman
To: Avance

Ulf-Henrik Kull
From: Roschier
To: Avance

Mathias Lindqvist
From: Hannes Snellman
To: Avance

Carl-Henrik Wallin
From: Hannes Snellman
To: Avance

Nicolas Berner
From: Hannes Snellman
To: Berner

Anu Tuomola
From: Castrén & Snellman
To: Citycon (in-house)

RISING STARS

Hannes Snellman
Sten Olsson

White & Case
Petri Avikainen

Dittmar & Indrenius
Wilhelm Eklund

Avance
Christopher Charpentier
Mathias Lindqvist