New York – March 4, 2022: Jennifer K. Grady, Richard J. Lee and John A. Clark of Crowell & Moring wrote a chapter in the recently published second edition of The Handbook of Loan Syndications and Trading. According to the book’s publisher, the Loan Syndications and Trading Association, “the Manual covers all aspects of primary and secondary lending markets, ESG, direct lending and more. »
In chapter 11 of The manual, Grady, Lee and Clark provide an overview of credit default swaps (LCDS) and loan total return swaps (LTRS), which market participants have used to gain or “synthetically” hedge exposure to credit risk and commercial loan returns. Beginning with the LCDS, the authors describe how the product evolved in the mid-2000s from a bespoke variant of credit default swaps to a standardized form of swap contract designed to solve definition, settlement and others that arise when referencing loans.
Today, LCDS transactions are less common than LTRS, and Grady, Lee, and Clark describe in detail the legal structure, cash flow mechanics, financial uses, and risks of the LTRS product. The authors also highlight commonly negotiated LTRS points of agreement and introduce legal concerns that arise from US tax laws, the Bankruptcy Code and the extensive swap regulatory regime in place since 2010 under the US Dodd-Frank Act. Wall Street Reform and Consumer Protection Act.
Grady is a partner in the firm’s New York office and co-chair of the Corporate Group. She represents investment banks, broker-dealers, funds and other financial institutions in connection with derivatives transactions, distressed debt transactions and bankrupt debts and financing transactions.
Lee is a partner in the New York office and a member of the Corporate group. It focuses on derivatives, finance and debt and distressed debt trading. Lee is a CFA® charter holder. He has extensive experience advising investors and lenders on a wide range of alternative credit investments and structured finance transactions.
Clark is a senior counsel in the firm’s New York office and a member of the Corporate group. His practice focuses on derivatives, lending, other secured transactions, and distressed debt and receivables trading. Its clients include leading U.S. and foreign banks, swap dealers and brokers, private funds, and commercial end users of derivatives.
For more information and to buy The Handbook of Loan Syndications and Tradingmeet here.
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