- It is rare today that a
project lender, property development financier, PFI banker, MBO debt provider or
securitisation investor does not insist on its borrower taking out some form of interest
rate and/or cross-currency hedging. By and large, however, the implications of integrating
a swap into a structured financing are little understood and often ignored. At best,
current practice is often misrepresentative and lax.
Mastering Finance-linked
Swaps is the first book to offer clear, detailed, practical guidance on the key
commercial, operational, legal and documentation issues that arise. It will provide
lenders, swap providers, borrowers, finance consultants and lawyers with the confidence
and technical ability to ask the right questions at the right time, and to ensure that,
whatever the nature of the financing, the swap is correctly integrated into the structure.
Contents
About the author
Disclaimer
Acknowledgements
Author's foreword
1 Introduction
What is a finance-linked
swap?
Comparison with stand-alone
derivatives
Comparison with fixed rate
loan arrangements
Comparison with other
finance-linked derivatives
Size and shape of market
Structural formats
Current market practice
2 Swap and loan markets
compared
Similar but different?
Economic differences
Documentation differences
Operational differences
Legal differences
Cultural and conceptual
differences
Does it matter?
3 Key commercial
considerations
Hedging strategy
Economic symmetry
Credit symmetry
Prepayment
Security and intercreditor
issues
Transferability
4 Key documentation
considerations
Swap documentation
Loan documentation
Security documentation
Intercreditor documentation
Ancillary documentation
5 Key legal and regulatory
considerations
Overview
Capacity and authority
Suitability
Reliance
Reputation, regulatory and
litigation risk
Advisor liability
6 Market-specific
considerations
Common themes
Project financings
Property financings
PFI financings
MBO financings
7 Repackagings and
securitizations
Overview
Purpose of swap
Illustrative structures
Rating agency approaches and
criteria
Significance for swap
documentation
Significance for swap
providers
8 Specialized applications
Swaps linked to debt capital
market instruments
Share scheme hedges
Swaps with AAA-rated
derivative product companies
Accrual swaps
Building society
applications
Private client applications
9 Project managing
finance-linked swaps
Who manages?
Managing the borrower
Managing the
lender/syndicate
Managing the swap provider
Managing the rating agencies
Operational issues and
timing
Cost
Post-drawdown issues and
restructuring the deal
10 Conclusions
What constitutes best
practice?
Barriers
Drivers
A vision for the future
Annexes
Bibliography
222 pages