Derivatives
The Paul, Weiss Derivatives Group advises both buy-side and sell-side clients in the design, negotiation and execution of a wide range of derivatives instruments and transactions across a variety of underlying asset classes, including credit, equity, fixed income, distressed debt, commodities and FX. We advise funds and their investment advisers, corporate entities, and global financial institutions on how to structure over-the-counter (OTC) derivatives instruments for financing, hedging, leverage and synthetic exposure purposes.
Our team represents users of derivatives throughout the life of their transactions, resolving related credit, regulatory, legal and risk management issues. We routinely monitor and advise market participants with respect to regulatory compliance related to derivatives and other financial products, including implementation of the Dodd-Frank Act. We negotiate and implement comprehensive derivatives trading platform documentation for our corporate clients, as well as private equity funds in connection with portfolio company investments. We also represent clients in connection with their derivatives needs when they look to protect and/or enforce their rights against struggling or bankrupt counterparties; manage outstanding derivatives in a counterparty restructuring; or take advantage of strategic investment opportunities.
Our areas of focus include:
- Synthetic financings
- Synthetic risk transfer/regulatory capital relief transactions
- Credit derivatives
- Derivatives and bankruptcy
- Equity derivatives
- Derivatives trading and regulatory advice
- FX hedging in cross-border deal contexts
“They have the ability to navigate the complexities in derivatives and explain them in a way I can easily comprehend and translate.â€
- Chambers USA
Recognition
Legal 500 US: Highly ranked for Derivatives and Structured Products
- Manuel Frey has been recognized for over ten years by Chambers USA and IFLR1000
- Recommended by IFLR1000 2025 for our work in Capital Markets: Derivatives
- Legal 500 US: recognizes Manuel Frey and Kerri Durso as key partners
Recent Engagements
- Repo-Based Asset Financing – Advise major private equity funds and opportunistic hedge funds in the financing of loan and bond asset acquisitions and holdings through the use of repurchase agreements
- Total Return Swaps and Repurchase Agreements on Repackaged Notes – Advise investment funds in the structuring and negotiation of repackaged total return swap or repo-based financing facilities whereby the lender is secured by existing loan and bond portfolios of the investment fund, including advice related to structures involving the formation of bankruptcy-remote special purpose vehicle(s) to borrow and maintain synthetic exposure to the reference portfolio and continue to control voting rights over the loans and bonds
- Synthetic Leveraged Financings Through Total Return Swaps – Advise distressed opportunities investment funds in the monetization of large bankruptcy claims portfolios, single-borrower loan positions and swap portfolios with continued synthetic exposure to the underlying asset positions through total return swap transactions
- Synthetic Risk Transfer/Regulatory Capital Relief Transactions – Advise investment funds as protection sellers in SRT regulatory capital relief transactions involving credit-linked note and credit default swap structures
- CDS Advice – Advise numerous buy-side firms in their analysis and advocacy regarding actual and potential credit events and succession events including Caesar’s, Hovnanian, iHeart Communications, McClatchy, Sears and Windstream, and participation in ISDA working groups considering amendments to the Credit Derivatives Definitions and DC Rules framework in connection with “narrowly tailored credit eventsâ€
- Derivatives and Bankruptcy – Advise major U.S. financial institution regarding treatment of open swap positions in connection with the American Tire Distributors, Inc. Chapter 11 bankruptcy
- Equity Collar Hedges – Advise investment funds in the structuring of equity collar transactions to hedge concentrated stock positions including securities lending arrangements and borrowing facilities relating to the underlying put and call options
- Variable Prepaid Forward Transactions – Negotiate and advise stockholders who have concentrated positions in relation to transactions designed to diversify their holdings, protect against declines in stock price and comply with selling restrictions, while deferring taxable gains until settlement of the transaction
- Convertible Note Hedges – Advise U.S. and foreign investment banks and issuers in structuring and negotiating call spread transactions, capped calls and share lending arrangements in connection with convertible note issuances, and represent sellers and acquirors in negotiated unwinds of note hedge and warrant trades and capped calls in connection with make-whole fundamental change transactions
- Deal-Contingent Hedges – Advise private equity and corporate clients regarding deal-contingent hedge instruments that protect against risks associated with planned merger transactions and IPO launches, including FX price and interest rate risks
- Spin-off of Proprietary Trading Platform and Creation of Hedge Fund – Advise the global principal strategies division of a U.S. broker-dealer in the spin-off from the broker-dealer and establishment of an independent hedge fund, including the negotiation of total return swap and repo-based asset transfers, financing agreements, establishment of a prime brokerage, give-up and derivatives trading infrastructure and ongoing trading advice
- OTC Derivatives Trading Documentation Infrastructure – Advise large and medium-sized hedge funds, private equity funds and hybrid investment vehicles in the structuring, negotiation and implementation of the comprehensive suite of derivatives trading documentation, including ISDA Master Agreements, collateral agreements, Futures Account Agreements and derivatives clearing documentation, repurchase agreements, prime brokerage agreements, master confirmation agreements, securities lending agreements, give-up arrangements and related documentation, and provide specific trade-related analysis and advice
- Swaps Regulations Compliance – Advise U.S. and non-U.S. financial institutions and corporate clients in the analysis, implementation and compliance with Dodd-Frank, EMIR and other derivatives regulations, including the cross-border application of CFTC swap regulations, clearing and reporting obligations, swap dealer/major swap participant registration and uncleared swaps requirements
- Interest Rate, Commodity Price and FX Hedging Platforms – Advise borrowers in connection with requisite and discretionary interest rate, commodity and FX hedging transactions under syndicated secured loan facilities and project financings and negotiation of related trading platform documentation
- Claims Trading Advice – Advise major U.S. bank as market maker and investment funds as investors in bankruptcy claims trading secondary markets relating to claims resulting from bankruptcies such as Lehman, Eastman Kodak, Westinghouse Electric Company and LatAm
