Practice

Derivatives and Structured Products

Comprehensive Counsel for Derivatives and Structured Products

Sheppard advises banks, investment funds and energy companies on the full spectrum of derivatives and structured transactions. 

With technical depth and market experience, we deliver practical solutions that help clients manage risk, achieve financing goals and navigate regulatory change. 

Technical Precision in Trading and Structured Transactions

Sheppard’s Derivatives and Structured Products team provides clients with cross-disciplinary strength and a track record in high-value structured transactions. 

Clients value our ability to combine technical precision with commercial pragmatism. Recognizing the dynamic and complex nature of trading and structured products markets, our team delivers responsive, commercially focused advice to keep transactions progressing smoothly while proactively managing risk.

We regularly counsel on swaps, options, forwards, futures and structured financings across asset classes, including commodities, interest rates, credit, foreign exchange and equity. We also negotiate ISDA Master Agreements, credit support annexes, prime brokerage agreements and clearing documentation, tailoring each to client needs and counterparty requirements. 

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Experience

Representative Matters
  Synthetic Financing Transactions
  • Representation of national bank in structured joint venture to invest and finance investments, on a tax-efficient basis, in renewable energy projects (wind and solar).
  • Representation of market leader in industry efforts to restructure tender option bonds for Volcker compliance.
  • Representation of a large asset manager in a series of total return swaps on a revolving portfolio of loans.
  • Representation of a large hedge fund in a structured put/call over a managed account and in various barrier options.

Energy and Commodity

  • Representation of various sponsors and developers of renewable energy projects in long-term power hedges, basis swaps and the sale of RECs and other attributes.
  • Representation of various renewable energy project companies in proxy revenue hedge transactions.
  • Representation of various lenders in the negotiation and diligence of long-term power hedges for dozens of renewable energy project companies.
  • Representation of various power suppliers and of consumers of power in virtual power purchase agreements and contracts for differences.
  • Representation of large utilities in various power and natural gas purchase, supply, and hedging agreements, including ISDA-, NAESB-, and EEI-based agreements.
  • Representation of a power generation facility in a synthetic tolling agreement.

Municipal Derivatives

  • Representation of large asset managers in structuring and implementing Volcker-compliant tender option bond programs for both tax exempt and taxable municipal securities.
  • Representation of a major participant in the secondary market for mortgage­ backed securities in hedging activities connected with tax-exempt tender option bond programs.

Credit Derivatives

  • Representation of multiple hedge funds in credit derivatives facilities for bank loans.
  • Representation of a major money center investment bank in structuring, documenting, and issuing credit-linked notes.
  • Representation of a large hedge fund in implementing a broad-based events trading strategy with multiple counterparties.

Equity Derivatives

  • Representation of buy-side counterparties in negotiating master confirmations and other documentation for equity swap, forward and option transactions.
  • Representation of various issuers of convertible notes in strategies to hedge dilution and price risk, including capped call transactions.
  • Representation of various public companies in hedging strategies related to stock buy-backs, including accelerated share purchases.

Controversies

  • Representation of a Fortune 100 corporation in litigation against a large European bank concerning the termination of various interest rate, commodity, and foreign exchange transactions.
  • Advised commodities trading firm on issues related to energy futures contracts in the ERCOT market.

Bankruptcy & Insolvency

  • Representation of dozens of clients, including several large pension plans, multiple asset managers in the SIPC proceedings and in the bankruptcy proceedings of MF Global and Lehman Brother as well as Enron.
  • Representation of a Fortune 500 integrated, downstream energy company in “safe harbor”-related bankruptcy issues involving a chapter 11 counterparty.
  • Representation of an Australian gold mining company in “safe harbor”-related bankruptcy issues involving a chapter 11 counterparty.

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