CDOs and Synthetic Structures

Synthetic Structures

The Hunton & Williams LLP nationally recognized securitization practice includes a vibrant and growing niche in collateralized debt obligation (CDO) transactions, synthetic structures and complex resecuritizations. We serve as transaction counsel, as well as counsel to underwriters, managers, swap counterparties, trustees and other participants in arbitrage, balance sheet, cash flow, synthetic and other CDO structures. We regularly represent one of the most recognized CDO issuers not only in structuring and issuing CDO securities, but also in programmatic legal matters. The CDO group has worked with a wide variety of underlying asset categories, including asset backed securities, mortgage backed securities, high yield debt, corporate debt, distressed debt, trust preferred securities (issued by both banks and insurance companies); mortgage insurance risk and other asset types.  These transactions include static and managed structures.

With our broad experience in derivatives, Hunton & Williams LLP also has been at the forefront with its clients in structuring and executing complex synthetic securitizations and synthetic CDO transactions, utilizing credit-linked notes, credit default swaps and total return swaps. These more recent representations build upon decades of experience in structuring pioneering securitizations and resecuritizations. We served as issuer’s counsel in the first publicly-registered resecuritization, and continue today to structure cutting-edge resecuritizations.  

The firm approaches its representations in CDO transactions from a broad multidisciplinary perspective. Members of the CDO practice group understand the legal issues involved in CDO and synthetic transactions, including issues relating to bankruptcy and insolvency, secured transactions, derivatives, insurance, bank and broker-dealer regulations, regulatory capital, and securities laws, including the Investment Company Act and the Investment Advisers Act. In addition, we work closely with experienced attorneys on our tax team to ensure that our CDO transactions are structured efficiently for tax purposes.

Our lawyers are leaders in the securitization, derivatives, and loan syndications industry and bar groups, including the American Securitization Forum, the Bond Market Association, International Swaps and Derivatives Association, Inc. (ISDA), the Loan Syndications and Trading Association (LSTA) and the American Bar Association. For example, one of our partners is chair of the Structured Finance Subcommittee of the American Bar Association. Several of our lawyers were instrumental in drafting letters to the Securities and Exchange Commission regarding Regulation AB, the securities offering reform proposal, and the concept of establishing a disclosure regime for public offerings of synthetic securitizations. In addition, on a quarterly basis we author the UK Roundup and US Roundup articles for the Derivative Use, Trading and Regulation publication.

We bring value to our clients not only because of our vast experience and knowledge, but also because of our client-oriented approach to providing legal services. These are our guiding principles:

  • Understand what is important to the client and what is not. Cover the bases, but do not get in the way of accomplishing the objective.
  • Be vigilant to identify issues that might arise and look for imaginative ways to resolve them. All parties are best served by the early identification of potential issues and the clear allocation of risks.
  • Be flexible. Every transaction will have its own idiosyncrasies.  Be prepared to accommodate them.
  • Keep it simple. Thoroughness need not demand complexity.
  • Be efficient.
  • Be responsive.