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

CONTEXT AND TRENDS
The current economic problems in Greece are not helping the Dutch market. "These are uncertain times....

CONTEXT AND TRENDS

The current economic problems in Greece are not helping the Dutch market. "These are uncertain times. There's a pipeline for corporate deals and financing, all of the sudden things happen in Greece and everybody takes offers off the table," says a partner. In line with the Basel III requirements, banks have had to take austere measures to help with their balance sheets. "The Basel III recommendations or requirements for banks will tighten credit lines for companies even more," notes one partner.

Just like other countries in Western Europe, banks in Netherlands have their activities reduced in terms of "new money deals". "Currently financing has reached the limit," says a partner. Refinancing and restructuring have become their core business. If there is any new financing, banks would only lend to very good borrowers. "Banks are very cautious," is the general consensus.

What banks are interested in are deals such as acquisition financing and project financing. Lenders such as ABN Amro, NIBC, ING, BBVA, Banco Nacional de México and Crédit Agricole have kept firms busy with M&A linked transactions.

Whilst more established corporates are fortunate to get financing, smaller and medium sized companies will struggle to get any. Instead of bank lending, corporates are now turning to the capital markets. "Banks are trying to come up with new products, new ways to finance," confirms a partner. Bond issues in particular are becoming increasingly popular.

Some firms are also reporting growth in commodity financing. With the world's population growing and natural resources diminishing, lenders are willing to provide financing to do with businesses such as exporting fuel, or purchasing pork bellies. "Banks are willing to finance people purchasing those things on a more corporate level," explains a partner. "Dutch banks were quite early to pick up on that. ABN Amro is quite aggressive in this area," adds the partner.

Looking at the general make up of the banking sector. International banks such as RBS, Deutsche Bank and BNP Paribas have long made their presence felt in the jurisdiction, but partners question how active they have been. "They are busy worrying about their own jurisdictions," says a partner. Whilst European banks are not as active as before, firms are receiving mandates from Chinese banks. "The Chinese are looking for a piece of cake," says a partner. It's not hard to see why: ICBC has proved successful in the country by tripling their staff; Bank of China has been active in the Netherlands and Bank of Beijing is soon opening a branch in Amsterdam.

MAJOR LATERAL HIRES

Herman Wamelink
From: Allen & Overy
To: Norton Rose

Rutger de Witt Wijnen
From: De Brauw Blackstone Westbroek
To: Simmons & Simmons

RISING STARS

Allen & Overy
Max Mayer

CONTEXT AND TRENDS
The situation of capital markets in the Netherlands this year is very much similar to last year's: weakened equity capital markets (ECM) but more active debt capital markets (DCM). The only difference here is the degree to which these trends have increased....

CONTEXT AND TRENDS

The situation of capital markets in the Netherlands this year is very much similar to last year's: weakened equity capital markets (ECM) but more active debt capital markets (DCM). The only difference here is the degree to which these trends have increased.

Following the credit crunch uncertainties in the market, deals on the equity side were postponed or cancelled around the summer of 2011 and this had a real impact for the first half of 2012. "Overall activities in the (equity) markets are slow," says a partner. Traditionally used as a way to raise more capital, corporates now find ECM less attractive. "It's not so much that the evaluations are low. The problem is volatility," explains a partner. "It is extremely difficult to pull off any equity transactions. Nobody knows what's happening," adds the partner.

It's not all gloom and doom, there were some impressive IPOs in the first quarter of 2012. They were AVG Technologies on the NYSE; Sara Lee's listing on the NYSE Euronext Amsterdam; and Ziggo, the largest cable operator in the Netherlands, on Euronext Amsterdam. Ziggo was the largest IPO in Europe since 2009 and several firms were involved in different parts of the deal. "Ziggo was the IPO everybody was looking at; let's see if it might open up the IPO market," says a partner.

Firms have different thoughts when it comes to the ECM in the next few months. "Lots of deals are put on hold at the moment," says one peer, "Wait for quiet downs. Until that time, I don't' expect a lot of action". Another says: "There are a lot of IPO candidates, lots of industrial companies looking around, but these will only happen when the market returns to higher evaluations".

While ECM is and remains quiet for the next few months to come, DCM has been a lot more active. The lending environment is increasingly difficult for companies. Moreover, with the uncertain regulatory requirements banks are facing, corporates really have to find alternative ways of financing. "Banks welcome alternative financing; they are willing to participate in financing; they just don't want to do the whole lending," says a partner. This is where DCM comes handy. Similar to many other jurisdictions in Europe, the Dutch debt markets are being used by companies as a way of alternative funding, usually through bond issues. An example is an EMTN Programme for Enexis.

Although a few partners point out that the securitisation market started slowly in the beginning of 2012, securitisation remains popular just like last year. A partner notes: "Out of European securitisation the UK gets 60% and Netherlands 30%, so as a financing tool in Europe it is important". Another partner points out "There is not so much action as in the pre-crisis period, but there is a steady flow of RMBS transactions". Larger Dutch banks, ABN Amro or Rabobank, for example, have been involved in covered bond programmes.

CONTEXT AND TRENDS
Comments regarding M&A in the Netherlands differ from firm to firm. It has been difficult to access the market overall this year....

CONTEXT AND TRENDS

Comments regarding M&A in the Netherlands differ from firm to firm. It has been difficult to access the market overall this year. However, most partners agree that the M&A sector started quite slowly or "has been quiet" in the beginning of 2012. "Increased capitalisation requirements means small banks are not able to cope, M&As will be financed by larger banks," explains a partner. With certain requirements, banks have to meet and the uncertainty from the financial crisis, bank lending is increasingly difficult for corporates to acquire. "A lot of deals were put on hold or not put on table," notes a partner. In general, the market also agrees that M&A has started to pick up. "The market is recovering a little bit from the Euro crisis".

With financing still difficult, partners notice that public M&As have been more active than private ones, such as the TNT Express public offer. Or at least there are buyers considering public M&As, such as America Movil's potential acquisition of KPN, a Euronext listed Dutch telecommunications company.

A large number of M&A deals in the country are usually done through a controlled auction, however firm's have noted a drop off in these type of deals in Dutch M&A. "We've seen less controlled auctions, but there are still a few," confirms a partner. This is probably because there is a price mismatch between buyers and sellers, where the buyer is not willing to offer the highest price in the auction.

While some partners feel there are not enough private equity (PE) deals in the market, others see such deals are still their core business. "In PE, there is a take up but financing is still difficult. Perhaps secondary PE transactions," says a peer. As can be seen from the deals list, PE houses such as CVC Capital Partners and 3i have been keeping firms busy.

The next 12 months will be very hard to predict. Some partners say M&A "will stay the same, as long as the crisis is not solved, people still stay uneasy". Others feel that "it will continue to pick up" or at least buyers are interested in deals but transactions may not go through: "there are interests but may not have closing".

MAJOR LATERAL HIRES

Kris Ruijters
From: AKD
To: Boekel de Nerée

Marein Smits
From: Boekel De Nerée
To: Wintertaling

Jan Willem de Boer
From: De Brauw Blackstone Westbroek
To: Linklaters

Arnout Stroeve
From: Houthoff Buruma
To: Van Doorne

Jan Willem Schenk
From: Baker & McKenzie
To: Van Doorne

Marc van Campen
From: Baker & McKenzie
To: Van Campen Liem

Maurits Tausk
From: Baker & McKenzie
To: Van Campen Liem

RISING STARS

Stibbe
Björn van der Klip

CONTEXT AND TRENDS
Project financing in the Netherlands is becoming increasingly hard. With market uncertainties and difficult bank lending, "only the best projects achieve financing," says a lawyer....

CONTEXT AND TRENDS

Project financing in the Netherlands is becoming increasingly hard. With market uncertainties and difficult bank lending, "only the best projects achieve financing," says a lawyer. With PPP (public-private partnership) projects still booming in the country, it is important for both lenders and borrowers to seek alternative ways of funding.

Historically all projects relied on bank loans. Now different financial institutions are involved in lending, such as insurance companies and pension funds. "This is to increase the diversity of where financing comes from," says a partner. Diversifying the source of funding is crucial, but these types of institutions have their own regulatory issues to deal with such as Solvency II, just like banks are facing requirements from Basel III.

A rather experimental way of financing could be through project bonds. Debt capital markets (DCM) is increasingly popular as a way for corporates to get their financings. However, since all major projects require long-term, substantial financing, it is still rather too early to test DCM financing on projects. "It's not used," says a partner, "but likely to be used in the next coming years".

Some firms are now working with the European Investment Bank (EIB), the European Union's financing institution, to provide advice on financing of projects. One such idea is the use of project bonds.

With many road PPPs going on in the country, funding possibilities are being investigated or possibly tested. For example, the N33 may be funded using a combination of an Index Link debt with commercial bank facility.

In terms of sectors, firms are busy receiving mandates from all sorts of directions since many more are in the pipeline: water, infrastructure, real estate such as Military Museum, hospitals and port terminals such as Argos. "We are pre-booked for a few years ahead," says a lawyer.

Partners predict that the financing conditions remain tight, but are confident many more projects to come. PPP projects will flood the country so will private projects such as renewable. Funding solutions are still being created and tested.

MAJOR LATERAL HIRES

Leon Hoppenbrouwers
From: AKD
To: Allen & Overy

CONTEXT AND TRENDS
No matter how much trends differ from firm to firm, one thing in the restructuring and insolvency market that remains consistent is that firms are still busy dealing with bankruptcies. "In general this year the practice is very busy," confirms one partner....

CONTEXT AND TRENDS

No matter how much trends differ from firm to firm, one thing in the restructuring and insolvency market that remains consistent is that firms are still busy dealing with bankruptcies. "In general this year the practice is very busy," confirms one partner. "Both domestic and international cases, that's where we see the R&I practice continuing". Banks are not cooperative either. "Banks are bound by the Basel III rules, they are not flexible," explains a partner. "Banks have troubles too".

No sector is safe, one perfect example is retail. "Thanks to international deals, for example, book shops and electronic stores go bankrupt," notes a partner. Competition from other European countries also adds to the crisis. "There is competition coming from Eastern European countries. For example, Polish companies doing transportation in the Netherlands," continues the partner. In general, partners also agree that real estate is the most problematic industry.

Normally banks would focus on helping debtors and try to find a solution to the problem. But clearly this is not the case anymore. "Banks now say 'Look, it's been a couple of years, there's no improvement, we have no option' especially to real estate and construction companies," says a peer.

Distressed businesses are not able to refinance like they used to in the pre-2008 era. With no other option, the market sees the revival of pre-pack. "Netherlands is used to pre-packs," comments a partner. "When companies file for bankruptcies they immediately start a new business, by doing that companies may get a better price for assets."

Whilst pre-packs are not illegal, they are certainly not part of the current insolvency law. The country has the oldest insolvency act in Europe and although a new insolvency law was presented two years ago to the parliament, unfortunately it was abandoned. "It's not part of the law, but it's not against the law either," argues a partner. "We still use the old insolvency act, which is fine by the way."

RISING STARS

NautaDutilh
Barbara Rumora-Scheltema