Norton Rose Fulbright expanded its municipal bond business by 51% last year, outpacing growth in the market and jumping three rungs higher on the league table rankings for bond counsel.
Norton Rose Fulbright finished 2015 with a par amount of $15.25 billion, up from $10.10 billion the year before, jumping to fourth place from seventh, according to Thomson Reuters data. The firm leapfrogged past Kutak Rock LLP, Sidley Austin LLP and Stradling Yocca Carlson & Rauth . It still trails Orrick, Hawkins and McCall Parkhurst & Horton LLP.
Bob Dransfield, U.S. head of finance for the London-based law firm, said Norton Rose Fulbright has a long history in public finance, expanding from a Texas base to other offices throughout the country. Its growth has given the firm expertise to represent clients from a variety of sectors and to deal with an increasingly complex regulatory environment, he said in an interview.
"We are committed to public finance and the firm's philosophy is client service," Dransfield said. "We have to know a lot about our clients' business and understand what they want so that we can better serve them. We are not focused on dollar volume exclusively, but additionally the overall volume which provides us exposure to different financing structures."
Lawyers at the firm are trained to get to know clients and their businesses. The firm has integrated teams assigned to clients with bond, tax, securities and disclosure attorneys. Dransfield said the business climate has recently been favorable, and he expects that to continue.
The Texas home base helps, too. The state's issuers sold $46.27 billion of bonds in 2015, a 12.4% increase from 2014's total of $41.15 billion, to rank second behind California. The Texas market, where McCall Parkhurst is also based, is getting more crowded for bond counsel. San Francisco-based Orrick announced at the beginning of the year that it would open a new office made up of 20 attorneys across several specialties in Houston.
According to data from Thomson Reuters, Norton Rose Fulbright handled deals with a par amount of $8.28 billion in Texas in 2015, compared with none for Orrick. California, where Orrick handled a par amount of $24.8 billion in 199 deals, was Norton Rose Fulbright's second-biggest state at $3.99 billion.
"With a good presence in Texas, we get to see a lot of different types of transactions," Dransfield said. "Texas is a good place for doing this for many different reasons. The many different types of transactions we see allow us to become experts in different types of financings so, going forward, we can suggest structure alternatives that help our clients meet their goals."
Dransfield said the firm benefits from the variety of business, both in Texas and other areas of the country.
"We can also bring local intelligence into the mix," he said. "When it comes to current best practices, we can see where the trend lines are."
Education was the firm's biggest sector, accounting for $4.68 billion of deals. The general purpose sector was next at $3.89 billion.
Dransfield said educational institutions have benefited from a growing population, which increases the demand for school facilities.
"In places like Texas, it is a very active space," he said. "These population projections are significant and drive the need for more classroom space, cafeterias, gymnasiums, etc."
All education based deals in Texas are insured by the Permanent School Fund Guarantee Program. In 1983, Texas voters approved a constitutional amendment that provides for the guarantee of school district bonds by the Permanent School Fund. On approval by the commissioner of education, bonds properly issued by a school district are fully guaranteed by the corpus of the Fund. Today, income from the Permanent School Fund provides approximately $765 million a year to local school districts.
"It's a solid program, cost effective and the state used good judgement in trying to help the education system," said Dransfield.
Bond counsel and other advisors are in greater demand as issuers seek to avoid penalties under the Securities and Exchange Commission's Municipalities Continuing Disclosure Cooperation initiative and other new regulations to promote transparency. Dransfield said smaller firms may be at a disadvantage, as they lack manpower to stay on top of the new rules.
"Clients are focused on reducing risk and being compliant with all the rules. We have a sufficiently broad practice, and we devote time to advise them in this area," he said. "Today, it is more than just traditional issues. There are also tax issues, bankruptcy issues and securities laws issues and we have to be experts in all areas."
