Banking & finance annual report
could be more international funds relying on Spanish law , not only for restructuring situations but also for new facilities .” Pérez López adds that there is “ uncertainty as to the proceedings and timings for the recognition of English court rulings in Spain after the UK leaves the European Union ”.
However , Ruiz-Camara argues that English law will continue to be used outside the UK , regardless of Brexit . He adds that Brexit will create a lot of work for lawyers as “ it will activate transactions which would not have happened otherwise and deals will have to be restructured ”. In a global context , there is an understanding that the US government could be set to abolish some existing banking regulations . Jabier Badiola , partner at Dentons says that , if this was to happen , it could lead to “ financial
“
There was a slowdown of transactions due to Brexit and my concern is that this slowdown may return following
” the UK ’ s invoking of Article 50 . Rafael Aguilera Gómez-Acebo & Pombo business being transferred there [ the US ]”.
Disappointed investors There have been some “ inconsistencies in the interpretation of the law by different insolvency courts ” that have disappointed investors , according to Ruiz-Camara . However , he adds that there have been more deals , particularly disposals and securitisations . How will law firms adapt to the changing market conditions ? Ruiz-Camara says that some firms could adopt the approach of having smaller teams and being more selective in the deals they take on .
If work is of a commoditised nature , clients are not willing to pay significant fees , say lawyers . However , there is a perception that , if the client believes the law firm is adding value to the deals , they will pay larger fees . Lawyers also report that some clients have panels and that some law firms agree to offer some services for free in order to be given the opportunity to bid for future work . Freshfields ’ partner
Ana López says that one of the major developments in recent years is that it is becoming more difficult to predict exactly how deals will be “ structured and refinanced given the wide range of financial instruments and flexibility that are available in the market ”.
Alfredo Barona , partner at DLA Piper , says in general , the market is improving and there has been an increase in leveraged deals . However , he adds that global political uncertainty is a concern . In addition , Barona observes that the market is now much more challenging for lenders due to the increase in competition and the difficulty in finding attractive business that requires financing .
There is an increased interest in direct lending , but there is considerable competition and limited opportunities for lenders at present , according to Clifford Chance partner Rodrigo Uría . He adds : “ The new lenders entering the market are here to stay – it ’ s currently a borrowers market and they are driving the deals .”
EU : Uncertain future Pérez López says that the sophistication of both products and players in the Spanish finance market continues to increase , and
Spain : What are currently the biggest opportunities for law firms in banking and finance ?
“ Lending activity is expected to continue benefiting from low borrowing costs . In addition , any deregulation resulting from Brexit or US efforts to dismantle certain bank regulations could lead to additional capital becoming available to be deployed elsewhere .” Michael J . Willisch , partner , Davis Polk & Wardwell
“ We expect the number of Spanish banking entities to be reduced through consolidation . In addition , depending on Brexit , there might be an increase in business opportunities in Spain and a corresponding increase in work for Spanish law firms . We think the Spanish economy is growing faster than certain other EU countries , which makes Spain an attractive European market .” Vanessa Armas , of counsel , Jones Day
“ Global firms that can offer seamless capabilities across a large number of jurisdictions will be best positioned to take on the most relevant work . The banking and finance space will increasingly see foreign laws interplaying with local laws and overseas lenders aiming to participate in transactions that were previously thought to be local . A good example is how some financing instruments such as high yield bonds – which are subject to New York law – are now widely used across Europe . The high yield bond is typically accompanied by a revolving credit facility that may be subject to English law . And both the bond and the facility may benefit from local security . This will entail that the firm must have full capabilities to advise under all these laws .” Fernando Navarro , partner , Ashurst
“ The growth of alternative financing and shadow banking . This type of financing is quickly positioning itself in the market as a source of lending operating in parallel to traditional banking finance and it is very quickly becoming a growing presence in the Spanish lending market .” Ramón Ruiz de la Torre Esporrín , partner , Ontier
“ The appetite of foreign investors for real estate assets in Spain , including premium office buildings in Madrid and Barcelona , as well as hotels and commercial centres will continue to boost real estate finance practices . On the other hand , the reactivation of the M & A market in Spain may lead to the comeback of leveraged buyout transactions .” Xavier Foz , partner , Roca Junyent
“ The current market is especially attractive for those law firms brave enough to innovate and explore offbeat ways of providing legal services . Major changes are happening in the global and local financial sectors , and those who have an entrepreneurial spirit may be able to shine . Brexit is a clearly potential source of new business and advice is already being sought by clients .” Abraham Nájera , partner , CMS Albiñana & Suárez de Lezo
28 • IBERIAN LAWYER • March / April 2017 www . iberianlawyer . com