Mallesons Stephen Jaques has capitalised on the return of the kangaroo bond market acting for all 41 deals in 2009; Clayton Utz was the only other Australian law firm to work on a deal. There have been A$18.2bn worth of foreign bonds issued by non-Australian companies in the domestic market this year, which marks a remarkable turnaround from the start of the year when the market had disappeared completely.

At the start of April there had still not been a single issue of a kangaroo bond in 2009 but the bottoming out of the GFC lured foreign development banks and sovereign funds back to the market resulting in nine issues in October alone.

“People got less worried about the GFC basically,” said Mallesons partner Greg Hammond, who has worked on most of the deals since the first one in 1991. “The Australian market has also recovered more quickly than other markets and therefore investors in Australia have been more prepared to invest in foreign bonds than other people.”

Hammond expects the strong run to continue into next year, which will mean that the trough came in 2008 when just A$10.2bn of kangaroo bonds were issued. The market was already slowing down in 2007 when A$19.5bn on the bonds were issued – a significant drop from the peak in 2006 when A$32.4bn worth of bonds were issued. If the last eight months of 2009 were prorated over the full year, it would suggest a market of A$27.3bn.

In 1991, when the first foreign bond was issued, Mallesons made a strategic decision to set up a dedicated team to look after the debt capital markets, Hammond said. “As a result of that over the last 18 years we’ve been involved with most of these issuers on a consistent basis,” he said.