Freshfields Bruckhaus Deringer has advised the Royal Bank of Scotland (RBS) on the second-largest one-day share placing this year worth £2bn.
The money was raised and will be used to finance RBS's acquisition of Pittsburgh-based Mellon Financial's retail, small business and commercial banking businesses.
The RBS placing, second only to Vodafone's £3.5bn call in May, gives an unexpected boost to the UK stock market, which has fallen 20% in 18 months.
It also defies the falling banking sector by increasing RBS's equity by 5%. Half-year profits are expected to be more than £2.75bn – a jump of 37% on last year. After record cash calls from Vodafone and British Telecommunications in May – which raised £9.4bn – and now the RBS call, an estimated £15.6bn has been raised in new equity issues this year, nearly as much as in the whole of 2000.
But a UK stock market rebound is unlikely. Recent downbeat forecasts coming from the US have snuffed out any hope of an upturn, with Federal Reserve committee chairman Alan Greenspan reporting that the world's biggest economy remains fragile and a recovery has yet to be assured.
Corporate partner Julian Long, who led the Freshfields team with US securities partner Sarah Murphy on the placing and the acquisition, said: "I do not see this placing as a sign of market recovery. It is more an example of how established companies with a lot of liquidity in the market can still place large amounts of shares when they have a good story to tell."
A key driver in RBS's success was its merger with NatWest last year – on which Freshfields also advised – which integrated £21bn into its operations.
This latest acquisition is part of RBS's plan to beef up its US operations and is believed to be the first in a series of acquisitions. Long says investors are looking for such confidence. "If the market believes in a company's management, then there is still cash out there," he says.
A year ago Freshfields advised media giant Pearson on its rights issue to raise £1.7 bn.
US firm Sullivan & Cromwell is advising Mellon.