Practice Overview

Derivatives & Structured Products

The team at this firm is a respected choice to advise clients on derivatives transactions. Chambers Global 2015

European Law Firm of the Year. Global Capital Derivatives Awards 2015

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Our Derivatives & Structured Products practice provides comprehensive legal advice and structured solutions with respect to all

aspects of our clients’ cross border transactional, organisational, operational, regulatory and legal compliance matters. Clients

include the world’s largest and most prominent financial institutions together with trade associations, insolvency officials,

investment managers, dealers, issuers, end users, service providers and underwriters.

The Derivatives & Structured Products team works closely with the rest of our full-service finance and tax practices in order to

serve our clients and provide complete and comprehensive advice. We are among only a few global law firms that offer

comprehensive derivatives expertise by lawyers qualified on both sides of the Atlantic and in Asia. Our team has experience of the

entire spectrum of OTC and exchange-traded derivatives and we are also adept at evaluating and documenting novel and

complex instruments.

The practice is ranked by all of the leading directories, and we have acted on transactions for numerous leading financial

institutions including Bank of America Merrill Lynch, Deutsche Bank, RBS, Citi, JP Morgan, UBS, BNP Fortis, Goldman Sachs and

Société Générale.

Asset classes and Structures

The practice regularly works on derivatives transactions referencing credit, equities, property prices, commodities and

insurance and pension products, as well as repackagings and complex structured products.

We represent a wide variety of clients in creating template derivative documentation and negotiating their derivatives

transactions. We also regularly provide strategic legal advice in situations involving distressed derivatives transactions.

Our derivatives experts have the capital markets and securitisation experience to intergrate their derivatives expertise into all

types of structure. This integration ensures that we can offer our clients complete advice and allows us to work closely with them

to devise bespoke structures that meet their needs.

We have advised leading financial institutions on a wide range of structured securities and other synthetic products, including

credit linked notes, CPPI (constant proportion portfolio insurance); CPDOs (constant proportion debt obligations); the

establishment of CDPCs (Credit Derivative Product Companies); collateralised debt obligations (CDOs); CDO squared

transactions; strategic equity financings; structured repos; conduit structuring and repackaged debt.

Derivatives & Structured Products

Regulation and dispute resolution

On the regulatory side, we advise banks, securities and futures brokers, exchanges and clearing organisations on the structuring,

documentation and distribution of derivative products, representing them before the FSA, the SEC, the Commodity Futures

Trading Commission, the Board of Governors of the Federal Reserve System, the National Association of Securities Dealers and

the National Futures Association. We have been involved in obtaining approvals from banking authorities for new derivatives

activities, the documentation of complex cross-border and cross-exchange transactions and the preparation of novel forms of

dealing and trading agreements. We represent and have close links with AFME, SIFMA and ISDA and recently set up a joint venture

with a leading investment bank to advise conduit sponsors on methods of keeping conduits off-balance sheet and minimising

regulatory capital costs.

As more and more banks are mired in high stakes litigation involving structured finance products, derivatives and special purpose

vehicles, Mayer Brown is regularly called up for its combined strength in the transactional and contentious areas. From a variety

of different assignments acting for arrangers, managers, trustees, counterparties, receivers, directors and creditors, our cross

practice teams have accumulated in-depth knowledge of a wide and diverse range of complex financial products.

Our deep knowledge of all aspects of complex financial structures makes us ideally placed to advise our clients when disputes

arise. We work closely with our market leading litigation and dispute resolution team to ensure that our clients receive the best

possible representation. As a result, we have been involved in many of the highest profile disputes arising from structured finance

products, derivatives and special purpose vehicles as well as corporate insolvencies and restructurings.

Integrated support

Our derivatives lawyers work closely with their colleagues in all practice areas, including our leading insurance and pensions

practices, to offer our clients innovative and original solutions best suited to current market needs.

We are one of the leading asset securitisation law firms in the world. Our market knowledge comes from the breadth and depth of

our participation in the market. Our lawyers have structured transactions involving a wide variety of asset types and classes, and

offer expertise in emerging markets, future flow transactions, SIVs, CMBS and RMBS. Our clients include a variety of participants,

from sellers and servicers to arrangers and underwriters, credit enhancers, investors and rating agencies.

2 x Derivatives & Structured Products

goes from strength to strength, and its range of experts is unparallelled for US legal and regulatory advice. Legal 500 UK 2015

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The following is a snapshot of our lawyers’ representative

experience within the Derivatives & Structured Products market:

CREDIT DERIVATIVES

• Represented an insurance company affiliate providing

a credit default swap for a Latin American airline ticket

future flow securitisation.

• Representing Bank of Montreal in connection with total

return swaps and various credit derivatives structures.

• Represented a major investment bank on a credit

derivative referencing an underlying equity derivative,

which itself was being used as a form of secured financing

for an emerging markets entity.

DERIVATIVES REGULATION

• Working jointly with our colleagues in the New York and

Frankfurt offices and in the FSRE team, we have prepared a

detailed memorandum for a major derivatives trade body

comparing the new laws and regulations made under the

Dodd-Frank Act (in particular, the relevant CFTC rules)

against the equivalent laws in France, England, Germany,

Spain and Italy, including EMIR and MiFID and MiFID II /

MiFIR.

• We have advised a major global derivatives trade body on

the effects of EMIR and various UK conduct of business

rules in connection with the “substituted compliance”

analysis under the CFTC rules.

• We have drafted the ISDA General Disclosure Statement

and the underlying annexes for all asset classes, as

published on the ISDA website.

• We have been advising banks, fund managers and

pension funds on the implications of the various new

EMIR obligations, and negotiating relevant parts of their

ISDA Master Agreements and investment management

agreements in relation to clearing, reporting, valuation,

record-keeping, timely confirmation, exchange of

collateral and other relevant requirements.

• We have negotiated client clearing agreements for both

EU and non-EU institution with some of the leading bank

clearing members at the major clearing houses. We have

also reviewed the standard documentation provided by

clearing brokers against the new ISDA/FOA Client Cleared

OTC Derivatives Addendum.

• We have advised one of the world’s biggest custodians

on its obligations in respect of client asset rules and its

custodian arrangements in the light of the Dodd-Frank

Act, EMIR and the Alternative Investment Fund Managers

Directive.

EQUITY DERIVATIVES

• Structuring, negotiating and documenting equity investments

in excess of $100 million including convertible preferred

stock, options, warrants, bridge loans and convertible debt.

• Equity derivative transactions, including prepaid forwards,

monetising collar and issuer options.

• Advised a large hedge fund on a strategic equity investment

in an insurance company using equity forward and swap

transactions, combining the firm’s expertise in derivatives,

financial regulation, insurance and corporate law.

• Advised a leading European investment bank on

documenting strategy-based equity derivatives indices for

inclusion in retail investment products.

FUNDS

• Advised $150 million knock-out call option linked to hedge fund

of funds and synthetic “unallocated cash return,” subject to

semi-annual basket rebalancing.

• Advised on a variable PPVUL hedge fund of funds linked

leveraged total return swap, collateralised by feeder level

investment holders and subject to monthly increases

and decreases for new investments and redemptions by

separate account holders.

• Structuring onshore and offshore hedge funds and hedge

fund of funds.

• Advised $90 million leveraged hedge fund of funds linked

total return swap, with embedded liquidity facility to be

used to make monthly purchases of reference assets and

notional adjustments to offset total return shortfalls.

• Advised on a conversion of secured loan to leveraged

feeder fund to new leveraged $175 total return swap

intended to replicate exposure to a principal protected

investment held by the prior feeder fund.

Recent Experience

4 x Derivatives & Structured Products

STRUCTURED CREDIT

• Advising Citigroup in relation to all credit events affecting

corporate reference entities in its structured products

portfolio, which includes synthetic CDOs, repackaged notes,

unfunded credit derivatives and CDO squared transactions.

• Advising HSBC on the establishment and development of

its multi-asset class proprietary index platform and various

financial products referencing its proprietary indices.

• Advised global industrial company, the Klesch Group, on

the €450m refinancing of the Heide Refinery in Germany by

Barclays, using an innovative structured finance arrangement.

• Advising ABN AMRO Bank N.V. on the structuring and

documentation of its US$550 million synthetic collateralised

debt obligation (CDO) programme, North Sea Island CDO

1. The transaction provides credit protection to ABN AMRO

over a EUR 3 billion portfolio of asset-backed securities

(ABS). ABN AMRO in turn provides credit protection to its

own North Sea Funding arbitrage conduit, which owns the

ABS portfolio subject to the credit protection. The North

Sea Island CDO transaction coincides with the restructuring

of the North Sea Funding arbitrage conduit (also set up by

Mayer Brown) to change its credit enhancement calculation

from a “matrix” to CDO model rating projections.

• Represented a German bank in negotiation of credit

default swap documents to cover CDO notes for a special

purpose company administered by the bank and financed

by asset-backed commercial paper.

• Advised ING on a £488 million CMBS with a Corporate

Counterparty and on a related novation of existing hedge

arrangements.

• Advised on a structured cross-collateralised and credit-

enhanced back to back swap program designed to create

synthetic AA credit rated swap product eligible for

participation in public finance interest swap structures.

• Represented Principal Capital in a synthetic warehousing

facility with JP Morgan.

• Represented ACA Management, L.L.C. as portfolio manager

and equity investor in a $1,000,000,000 synthetic CDO

with Commerzbank.

• Represented Fleet National Bank in a $150,000,000 Note

Purchase Agreement connected to a total return swap with Oil

Casualty Insurance, Ltd.

• Advised $30 million CBO mezzanine bonds, on a synthetic

credit default swap referencing a portfolio.

• Represented an investment bank on managing credit and

downgrade events in its asset-backed structured products

portfolios.

• Advised Lone Star in relation to the outplacement of

the refinancing of a EUR 2.6 billion structured finance

investment portfolio (re-packaging) from IKB Deutsche

Industriebank (consisting primarily of RMBS, CMBS and

CDOs) in the aftermath of the purchase of IKB by Lone Star.

DISPUTE RESOLUTION

• Acting for the bank in relation to a dispute arising out

of a series of credit default swap and synthetic CDO

transactions. The matter involves the city of Leipzig Water

Board, Kommunale Wasserwerke Leipzig GmbH, with

a total estimated value of US$320 million. Proceedings

are ongoing in the Commercial Court in London and the

Leipzig Regional Court in Germany.

• Significant involvement in local authority interest rate

swaps restitution litigation, acting on behalf of several

banks (UK and international) and brokers in context of

‘lead cases’ before the Court of Appeal, the European

Court of Justice and the House of Lords.

• In 2009, our London office was involved in three important

cases before the UK’s highest courts on matters involving

questions of contractual interpretation – two of these (Re

Golden Key Ltd (in receivership) and Re Sigma Finance

Corporation (in receivership) concerned complex

securitisation documentation and the interpretation of

the provisions governing payment priorities and the third

(Chartbrook Limited v Persimmon Homes Limited), a

commercial contract relating to a property development.

In this last case, we represented the UK housebuilder,

Persimmon, in a successful appeal to the House of Lords

(now the Supreme Court) securing a 5-0 victory for the client

overturning the decisions at first instance and the Court of

Appeal. This case represented Lord Hoffman’s last judgment

as a Law Lord and enabled him to reaffirm and develop the

purposive approach to contractual construction expressed in

his earlier judgment in ICS v West Bromwich Building Society.

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• Other cases involving structured financial products on

which we are currently advising include:

– Defending a bank as structure of a synthetic CDO with

guarantee of note obligations against claims of

negligence, mis-selling, misrepresentation and the way

in which the structure works;

– Defending a bank where the swap counterparty is a local

authority, giving rise to capacity and jurisdiction issues;

– Acting for an RMBS noteholder in a claim against a

Portuguese Arranging Bank for misrepresentation and

breach of contract - includes jurisdiction issues.

OTHER

• Advising ISDA on the development of new regulations

under Title VII of the Dodd-Frank Act.

• Advised one of the world’s biggest custodians on its

obligations in respect of client asset rules and its custodian

arrangements in the light of the Dodd-Frank Act, EMIR and

the Alternative Investment Fund Managers Directive.

• Representation of a number of UK occupational pension

schemes with respect to derivatives transactions.

• Representation of a UK insurer with respect to derivatives

transactions.

• Represented S&P Hedge Fund Index linked leveraged

total return swap with a variable asset allocation between

the Index and defeasing instruments and subject to

defeasance triggers and take out by a principal-protected

EMTN linked to the Index with initial leverage of 4:1 subject

to resets as the cushion changes.

• Established subsidiary to engage in derivative transactions

and negotiated triple A credit rating.

• Structuring and documentation for $6 billion benefit

responsive investment contract program and $3 billion

municipal guaranteed investment contract program.

• Represented Commerzbank in connection with a NASDAQ

stock cashless collar transaction with a notional amount

over $200,000,000.

• Advised the administrator of Lehman Brothers Commercial

Corporation Asia Limited on unwinding thousands

of derivatives positions with internal and external

counterparties.

6 x Derivatives & Structured Products

Key ContactsEDMUND “ED” PARKER

Partner, London

E: eparker@mayerbrown.com

T: +44 20 3130 3922

Edmund Parker is head of the London office’s Derivatives &

Structured Products practice. He is also co-head of the firm’s

global Derivatives & Structured Products practice, heads the

firm’s UK Capital Markets practice, and is a Co-practice leader

of the Indian Practice Group.Ed advises on complex OTC and

structured credit, equity and commodity derivatives

(including emissions trading), as well as insurance and

pensions-linked derivative structures. He advises on

distressed derivatives, together with our litigators and

insolvency specialists; as well as advising on central clearing

issues and derivatives regulation, together with our regulatory

team. Ed has strong structured finance/debt issuance skills in

particular in relation to CLOs and hybrid structures.

Ed has written extensively on derivatives matters . He is the

industry’s most widely published lawyer on the subject, with his

views regularly sought by the press and on television. His written

works include an acclaimed trilogy of derivatives books,

consisting of, as sole author Credit Derivatives: Documenting

and Understanding Credit Derivative Products, as sole editor

Equity Derivatives: Documenting and Understanding Equity

Derivative Products, and as co-editor Commodity Derivatives:

Documenting and Understanding Commodity Derivative

Products. He is currently co-writing a new book, Equity

Derivatives: A Practitioner’s Guide to the 2002 & 2011 ISDA

Equity Derivatives Definitions. Ed is fluent in Spanish.

JOSHUA COHN

Partner, New York

E: jcohn@mayerbrown.com

T: +1 212 506 2539

Josh Cohn is the head of Mayer Brown’s US Derivatives &

Structured Products practice and co-leader of the global

Derivatives & Structured Products practice. He concentrates

his practice on derivatives and has extensive experience as US

counsel to the International Swaps and Derivatives Association

(ISDA), and represents dealers and end-users in a wide range

of transactions.

Prior to joining Mayer Brown from Allen & Overy, Josh was the

Derivatives Counsel at Cravath Swaine & Moore in New York; a

Senior Vice President and General Counsel at DKB Financial

Products, Inc.; a First Vice President and Counsel at Security

Pacific National Bank; an Associate at LeBoeuf, Lamb, Leiby &

Macrae; and a Law Clerk at the US Court of Appeals - Ninth

Circuit, San Francisco, CA.

Josh is listed for derivatives law in The Best Lawyers in America

while the IFLR 1000 and The Legal 500 list Josh as one of the

world’s leading derivatives lawyers. Josh has been ranked in

band 1 of Chambers USA since 2008. In 2012, clients described

Josh as having “an almost encyclopedic knowledge of the

derivatives market.” In 2010, sources noted his “great depth of

experience and understanding of market trends.” In 2008 and

2009, clients noted he “...is one of the greats in derivatives

because of his extensive knowledge” and that he is “doubtless

one of the best derivatives lawyers in the world.”

Ranked Band 1 Lawyer for Structured Finance and Derivatives.

Chambers UK 2016, 2015, 2014

receives widespread acclaim from sources for his regulatory expertise on an array of derivatives issues. Sources say he is a ‘real leader’ who is ‘wonderful in his understanding of the market as a whole, his attention to detail and his experience.’

Chambers Global 2016

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DR. JOCHEN SEITZ

Partner, Frankfurt

E: jseitz@mayerbrown.com

T: +49 69 7941 1024

Dr. Jochen Seitz is a finance partner in the Frankfurt office of

Mayer Brown. He heads Mayer Brown’s banking & finance

group in Germany and is European Head of Capital Markets.

Jochen advises underwriters and issuers on the entire range of

debt capital markets and derivatives transactions, including

investment grade bonds, debt issuance programmes,

structured notes and OTC derivatives as well as certificates of

indebtedness (Schuldscheine). Furthermore, his practice

covers financial services where he advises banks, exchanges

and other infrastructure providers among others in

connection with the trading of commodity derivatives and

cross-border financial services.

Before joining Mayer Brown’s Frankfurt office in 2011, Jochen

worked for another international law firm, where he headed

the German Financial Market department.

CHRIS ARNOLD

Partner, London

E: carnold@mayerbrown.com

T: +44 20 3130 3610

Chris Arnold is a Partner in the Derivatives & Structured

Products practice of the London office.

Dual-qualified in English and New York law, Chris has

experience across a broad range of capital markets and

structured finance transactions, with a particular focus on

OTC derivatives and structured products. He has advised on

numerous complex derivatives for leading market participants

and has also been involved in many high-profile industry

initiatives.

Chris acts for the world’s leading investment banks, as well as

other financial institutions, end users, trustees, service

providers and industry groups. His practice covers derivatives,

repos and structured securities linked to interest rates, foreign

exchange, corporate and sovereign credit, equities,

commodities, funds, insurance risks and strategic indices. He

also advises institutions on legal risk management in relation

to derivatives, including situations involving distressed

transactions. He is a regular speaker on derivatives

documentation and regulation and has spoken at numerous

ISDA conferences in the US, Europe and Asia.

held in high regard for his work on derivatives. He often advises on launches and maintenance of pan-European offering platforms. One client states: ‘He has a good network in the industry.’

Chambers Global 2016

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“ is a good guy and a smart lawyer, whom clients find to be personable and intelligent.

Chambers UK 2016

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8 x Derivatives & Structured Products

VINCENT K. P. SUM

Partner, Hong Kong

E: vincent.sum@mayerbrownjsm.com

T +852 2843 2272

Vincent Sum is a partner of Mayer Brown JSM. He focuses on

complex capital markets matters, including structured

products, derivatives (including equity derivatives, credit

derivatives, corporate derivatives, fund derivatives and

commodity derivatives), securitisations, retail and non-retail

funds (including SFC approved funds, UCITS and ETFs),

secured lending and financing and debt capital markets

matters (including Rule 144A/Regulation S global bond

offerings). He advises underwriters, arrangers, portfolio

managers, issuers, trustees and institutional investors, and is

qualified to practice in Hong Kong, New York, and England and

Wales.

MARCIN PERZANOWSKI

Senior Associate, London

E: mperzanowski@mayerbrown.com

T: +44 20 3130 3306

Marcin Perzanowski is a senior associate in the Finance

practice of the London office having joined Mayer Brown in

2006. Marcin focuses on derivatives and structured products

(both listed and unlisted).

Marcin has extensive experience in advising on OTC and structured

derivatives for banks, corporates, funds, pension schemes and

insurance companies. He has worked on equity derivatives (including

index and equity linked products, corporate equity derivatives and

flow master confirmation agreements), credit derivatives (including

credit linked notes and credit linked deposit agreements),

commodities and commodity derivatives (including commodity

linked notes and commodities leasing), as well as various types of FX

and interest rates derivatives. He regularly advises on structured

notes programmes (including drafting information memoranda as

well any relevant final terms) and investment products referencing

proprietary indices, managed accounts and similar structures.

Marcin has considerable expertise in advising on the regulatory

aspects of derivatives, in particular in respect of the European

Markets Infrastructure Regulation and its various implementing

measures, as well as any related documentation. He has

negotiated a number of client clearing agreements and drafted

reporting delegation agreements for his clients. Marcin has also

written a submission to the European Parliament and the FCA on

behalf of the Association of Pension Lawyers in respect of the

new derivatives rules.

Marcin’s publications include three chapters in “Equity

Derivatives – Documenting and Understanding Equity

Derivative Products,” and two chapters on credit derivatives in

“Sovereign Debt and Debt Restructuring.” He has also co-edited

“Commodity Derivatives – Documenting and Understanding

Commodity Derivative Products,” together with Ed Parker.

He has completed secondments to The Royal Bank of Scotland

plc and HSBC Bank plc, where he advised on various aspects of

derivative transactions, including corporate equity derivatives

and various investment access products.

highlighted by peers and clients for his structured products expertise, and is singled out for his work representing clients on China-facing matters.

Chambers Global 2016

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‘Phenomenally able’ ‘Clearly on the partnership trail’.

Legal 500 2014

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About Mayer Brown Mayer Brown is a global legal services provider advising clients across the Americas, Asia and Europe. Our geographic strength means we can offer local market knowledge combined with global reach. We are noted for our commitment to client service and our ability to assist clients with their most complex and demanding legal and business challenges worldwide. We serve many of the world’s largest companies, including a significant proportion of the Fortune 100, FTSE 100, CAC 40, DAX, Hang Seng and Nikkei index companies and more than half of the world’s largest banks. We provide legal services in areas such as banking and finance; corporate and securities; litigation and dispute resolution; antitrust and competition; US Supreme Court and appellate matters; employment and benefits; environmental; financial services regulatory and enforcement; government and global trade; intellectual property; real estate; tax; restructuring, bankruptcy and insolvency; and wealth management.

Please visit www.mayerbrown.com for comprehensive contact information for all Mayer Brown offices.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown Mexico, S.C., a sociedad civil formed under the laws of the State of Durango, Mexico; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services. “Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

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