Nixon Peabody is at the forefront in the use of derivative products in the public finance market.
We deal with a broad range of derivatives, including interest rate swaps, caps, options, basis swaps, commodity swaps and currency swaps, using derivatives with new financings and restructuring and refunding existing financings.
Our team has drafted and negotiated the legal documentation for these products and developed guidelines to help lenders review how they are used. We advise on Dodd-Frank compliance, including drafting internal policies and procedures, completing ISDA Protocol documentation and bilateral contracts with swap counterparties.
Derivatives raise many federal tax issues. And as these tax aspects are critical in achieving the intended financial benefits, we advise our clients on the following:
- The treatment of derivatives as qualified hedges for arbitrage yield purposes
- Loans or investments associated with lump sum payments
- The effect of derivatives on the treatment of payments on a debt as tax-exempt interest
- Reissuance and change in yield concerns that may arise from the termination of a derivative
- The impact of a subsequent securitization of tax-exempt bonds
Who we work with
- State and local governments
- State agencies and authorities
- Corporate and nonprofit obligors
- Banking firms
- State: We serve as swaps/derivatives counsel to a state assisting with negotiating ISDA Master Agreements, amendments to swap documentation and novation of swap transactions as well as with Dodd-Frank Act compliance.
- State Transportation Agency: We serve as swap counsel to a state transportation authority—assisting with negotiation of ISDA Master Agreements, related documentation and confirmations involving interest rate and commodity swaps, forward starting swaps, basis swaps, swaptions and termination agreements. We have additionally represented this municipal issuer and affiliates with respect to the amending and terminating of swap transactions and with Dodd-Frank Act compliance.
- State Power Agency: We serve as swap counsel to a state municipal power agency assisting in the negotiation of ISDA Master Agreements, related documentation and confirmations involving interest rate and commodity swaps. We have represented this municipal issuer with respect to the negotiation of multiple swap transaction amendments, terminations and novations relating to the restructuring of bond issues or to the credit deterioration of the swap counterparty. We have additionally assisted this municipal issuer with Dodd-Frank Act compliance.
- Corporate Entity: We serve as swap counsel to a corporate entity and affiliates in negotiating Credit Support Annexes, ISDA Master Agreements and amendments to ISDA Master Agreements as well as with Dodd-Frank Act compliance.
- Nonprofit Entity: We served as swap counsel to a higher education institution in the negotiation of an ISDA Master Agreement, Credit Support Annex and Confirmation for an interest rate swap transaction as well as for the amendment and early termination of such swap transaction.
- Municipal Water District: We have represented a water district in the negotiation of an ISDA Master Agreement and related documentation and the novation of several interest rate swap transactions.