The Derivatives practice at Reed Smith advises financial institution clients on a wide variety of business, corporate governance, and regulatory and transactional matters related to the use of derivatives. The range of complex products on which the group's lawyers work encompasses securitization and related structured products of all types, including ABS, MBS, CDO and CLOs-primary, synthetic and squared-together with attendant CDS, wraps and other financial guaranty insurance; auction rate, index and similar securities; and interest rate, credit, equity, foreign exchange ("FX"), commodity and other derivatives.
Our ABS team has represented underwriters, lenders, issuers and borrowers in a variety of asset-backed securitization transactions, including consumer receivables such as motor vehicle loans and leases; credit card receivables involving a variety of complex structures like titling trusts and participations; equipment leases and loans; intellectual property, such as copyright, patents and cash flow transactions; and trade receivables. Our experience also includes setting up conduits and representing lenders and purchasers in a number of conduit transactions.
Our approach to this dynamic practice area is three-dimensional. First, we strive to provide clients with thorough yet practical advice on the myriad complex legal and regulatory issues they face when entering into derivatives transactions. Second, we recognize that good derivatives counsel often requires a team of lawyers in multiple practice and geographical areas. We use the depth and breadth of our capability to help clients resolve the multi-disciplinary issues that arise in connection with these transactions, with a presence in New York and London that enables us to keep a "real time" pulse on the epicenters of the derivatives industry. We regularly collaborate with litigators and insurance recovery lawyers in our Derivatives & Structured Products Disputes practice to deliver the most effective transactional services. Third, we partner with our clients to understand "why and how" they intend to use a particular instrument, in an effort to go "beyond the forms," and focus on the business and legal risks of that specific transaction.
Key transactional-side capabilities include:
- "Reverse Engineering" and negotiating key terms for a variety of structured products and hybrid instruments, such as equity-linked notes, credit-linked notes and synthetic CDOs
- Negotiating liquidity agreements and note purchase agreements, and generally advising on conduit transactions
- Negotiating schedules to ISDA Master Agreements and related ancillary documents
- Negotiating, reviewing and analyzing Credit Support Annexes to assess and minimize counterparty credit risk across derivatives transactions, and to address related custody issues
- Reviewing and analyzing existing ISDA documentation to identify potential differences
Key dispute-oriented capabilities include:
- CDS collateral valuation issues and disputes
- Distressed SIV and CDO negotiations and disputes
- Financial guarantee insurance restructuring, coverage and claims recovery