swap documentation in loan transactions: coordinating...

The audio portion of the conference may be accessed via the telephone or by using your computer's

speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Presenting a live 90-minute webinar with interactive Q&A

Swap Documentation in Loan Transactions:

Coordinating ISDA Master Agreement

and Loan Agreement Terms Documenting Covenants, Security, Required Consents,

Voting and Control, Reporting, and Regulatory Issues

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

THURSDAY, FEBRUARY 4, 2016

Robert Scherer, Counsel, Vinson & Elkins, New York

Guy Gribov, Senior Associate, Vinson & Elkins, Houston

Tips for Optimal Quality

Sound Quality

If you are listening via your computer speakers, please note that the quality

of your sound will vary depending on the speed and quality of your internet

connection.

If the sound quality is not satisfactory, you may listen via the phone: dial

1-866-873-1442 and enter your PIN when prompted. Otherwise, please

send us a chat or e-mail [email protected] immediately so we can

address the problem.

If you dialed in and have any difficulties during the call, press *0 for assistance.

Viewing Quality

To maximize your screen, press the F11 key on your keyboard. To exit full screen,

press the F11 key again.

FOR LIVE EVENT ONLY

Continuing Education Credits

In order for us to process your continuing education credit, you must confirm your

participation in this webinar by completing and submitting the Attendance

Affirmation/Evaluation after the webinar.

A link to the Attendance Affirmation/Evaluation will be in the thank you email

that you will receive immediately following the program.

For additional information about continuing education, call us at 1-800-926-7926

ext. 35.

FOR LIVE EVENT ONLY

Program Materials

If you have not printed the conference materials for this program, please

complete the following steps:

• Click on the ^ symbol next to “Conference Materials” in the middle of the left-

hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a

PDF of the slides for today's program.

• Double click on the PDF and a separate page will open.

• Print the slides by clicking on the printer icon.

FOR LIVE EVENT ONLY

SWAP DOCUMENTATION IN LOAN TRANSACTIONS

FEBRUARY 4, 2016

www.velaw.com

Confidential and Proprietary ©2016 Vinson & Elkins LLP www.velaw.com

6

1) Swap uses and risks

2) Documentation architecture

3) Integration into, and coordination with, loan

documents

4) Questions?

PROGRAM OUTLINE


7

• Common definition: a contract whose value is derived

from the value of an underlying asset

• Better definition: a financial instrument used to

transfer risk

• Uses:

– Speculating

– Financing

– Hedging

• Common types:

– Futures

– Forwards

– Swaps

WHAT IS A DERIVATIVE?


8

ANY RISK CAN BE TRANSFERRED

Borrower Lender $$$

Swap

Provider

fixed

%

floating %

floating

%

Example: interest rate risk


9

• Credit risk

• Price risk

• Currency risk

• Basis risk

• Tax risk

• Weather risk

EXAMPLES OF OTHER RISKS THAT MAY BE

HEDGED BY BORROWERS


10

• Counterparty risk

o Market risk

o Liquidity risk

• Default Risk

• Basis risk

• Legal risk

o Regulatory risk

RISKS WITHIN DERIVATIVE TRANSACTIONS


11

• ISDA Master Agreement

• Schedule

• Credit Support Annex

– Paragraph 13

• Confirmation

– Definition booklets

SWAP DOCUMENTATION


12

• Loan Agreement Covenants

– Indebtedness

– Liens

– Dispositions

– Hedging

– Mergers

– Reporting

• Events of Default

– Bankruptcy

– Cross Default

INTEGRATION INTO, AND COORDINATION, WITH LOAN

DOCUMENTS


13

• Security

– Can swaps be secured pari passu with lenders?

– Eligible providers and counterparties

– Waterfall issues

– Release of collateral

– Guarantees

– Setoff

INTEGRATION INTO, AND COORDINATION WITH, LOAN

DOCUMENTS


14

• Voting Rights

– Interests of lenders and providers may not be aligned

– Does provider have voting rights?

– Calculation of voting percentage

INTEGRATION INTO, AND COORDINATION WITH, LOAN

DOCUMENTS


15

PRESENTER BIOGRAPHIES

Rob's practice focuses on the structuring, negotiation and

documentation of structured financial products and other

over-the-counter derivatives, including interest rate,

commodity, currency and credit derivatives, repurchase

agreements, forward transactions, and other financial

products. Rob also provides regulatory advice relating to

derivative products, including with respect to compliance

with the Dodd-Frank Act and rating agency criteria for

structured transactions. Rob's clients include sell-side

financial institutions, as well as a broad range of buy-side

entities such as electric utilities, oil and gas producers and

private investment firms.

ROBERT SCHERER

COUNSEL

Guy’s practice focuses on syndicated and

structured/mezzanine financings, and preferred equity

investments, primarily in the energy space. He has worked

on numerous bank financings, mezzanine and structured

financings, preferred equity investments, and convertible

debt. He represents mezzanine funds, publicly and

privately held corporate borrowers and issuers, private

equity funds, and commercial banks. Guy’s energy industry

focus includes numerous matters involving oil and gas

exploration and production, oilfield services, refining,

distribution, storage and transportation, and retail.

GUY GRIBOV

SENIOR ASSOCIATE

666 Fifth Avenue

26th Floor

New York, NY 10103-0040

212.237.0229

[email protected]

1001 Fannin Street

Suite 2500

Houston, TX 77002

713.758.3295

[email protected]


16

Austin Houston

Dallas New York

London

Moscow

Dubai

Beijing Tokyo

Hong Kong

Abu Dhabi

Palo Alto Washington, DC

Riyadh

San Francisco

VE OFFICES


17 Confidential and Proprietary ©2016 Vinson & Elkins LLP www.velaw.com

T +971.2.412.0700

Austin

T +1.512.542.8400

Beijing

T +86.10.6414.5500

Dallas

T +1.214.220.7700

Dubai

T +971.4.330.1800

Hong Kong

T +852.3658.6400

Houston

T +1.713.758.2222

London

T +44.20.7065.6000

Moscow

T +7.495.544.5800

New York

T +1.212.237.0000

Palo Alto

T +1.650.687.8200

Riyadh

T +966.11.250.0800

San Francisco

T +1.415.979.6900

Tokyo

T +81.3.3282.0450

Washington

T +1.202.639.6500

THANK YOU

swap documentation in loan transactions: coordinating...

Documents