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Derivatives

Despite the recent upheavals in the financial markets—and the regulatory responses they have provoked—the changes in our Derivatives group have been more about the shifting landscape than about our core capabilities. We are still a “go-to” firm for financial institutions, investment funds, and other market participants that seek comprehensive advice on derivatives transactions, the often-complex facilities that attend them and regulatory matters.

We still regularly execute the full range of structured transactions, from the “plain vanilla” to the esoteric. Our deep experience in the financial industry—including long-standing relationships with all its key players—gives us a firm understanding of the business needs underlying each transaction, while our intimate knowledge of complex derivative concepts makes us unusually adept at creating custom “bespoke” swaps to effectively fill those needs.

The current constrained economic environment has brought about changes in those business needs, as well as in the mechanisms used to address them. Regulatory reform accounts for some of these changes. At the same time, the failures of major counterparties—and the significant losses that have accompanied them—have forced re-examination and, where necessary, renegotiation of many facility provisions, with an eye towards mitigating counterparty credit risk. Our broad experience with the many derivative types, with the related facilities, and with parties on both sides of the transactions and applicable regulatory regimes gives us both latitude and credibility in helping clients respond to these and other changes in the marketplace.

Derivatives transactions often call for the participation of other legal disciplines, and we regularly draw on the skills and experience of the firm’s banking, capital markets, bankruptcy, tax, benefits, and litigation groups—among others—in a multi-disciplinary approach to a wide variety of derivatives-related issues.

Our services include: 

  • Representing clients in all types of derivatives transactions, ranging from simple interest rate, equity, foreign exchange and credit derivatives to highly-customized structured derivatives, including structured total return swap facilities and fund-linked equity swaps 
  • Negotiating swap, repo, securities lending, futures, prime brokerage, clearing and other trading facilities as well as related collateral agreements
  • Advising derivatives clients on issues relating to distressed investments, bankruptcy proceedings, credit and succession events, and settlement questions regarding credit default swaps 
  • Advising market participants on compliance with the complex and expanding laws and regulations relating to the derivatives and futures industry, evolving trading infrastructure and litigation matters