Structured Products

Cadwalader's structured products practice includes the use of CBOs, CLOs, CDOs and grantor trust and owner trust structures to reconfigure the cash flows of asset-backed and other securities (including Brady Bonds, emerging market government bonds and loans, Eurobonds, and U.S. government agency securities). To date, we have assisted our clients in bringing over 200 CDO transactions to market. Such transactions have involved a broad range of asset types, including, among others, high yield bonds, leveraged loans, investment grade bonds, middle-market debt obligations, distressed debt, emerging market obligations, asset-backed securities, mortgage related assets, hedge fund interests, credit linked notes, synthetic securities, credit default swaps and interests in other CDOs. In addition, our extensive experience in the CDO area, coupled with our broad exposure to numerous other types of capital markets transactions, has enabled Cadwalader lawyers to play an instrumental role in the development of new structures in the CDO market. In particular, Cadwalader has extensive experience in:

Real estate-backed CDOs, multi-sector deals in which the collateral is a mix of CMBS, RMBS, REITs and asset-backed securities (one of the most active sectors in the CDO market, it is now typical that the ABS component of the collateral in such deals has been reduced or eliminated and the real estate component has increased)
All types of warehouse financing including on balance sheet warehouse facilities with forward sale agreements; credit default swaps; CDO issuer funding with loan facility
Loan origination criteria for purposes of no trade or business
Funded and unfunded synthetic CDOs, including static; lightly managed (credit impaired and removals only) and managed
Resolution of potential insurance issue for trade or business purposes in synthetic CDOs
QSPE static pool and FIN 46/first loss off balance sheet structures
Commercial paper conduits, credit default swaps and put structures (both in deals and as repackagings) in connection with 2a-7 CDO tranches
CDO repackagings
Establishing CDO hedge and equity funds

In addition to the foregoing, we regularly assist our clients in the structuring and development of a full spectrum of customized derivative products and transactions, including fixed income, equity, currency, and derivative linked swaps, forwards, notes, warrants, caps, floors, collars, total return instruments, options, credit derivatives, mortgage-backed and asset-backed derivatives, municipal derivatives, futures contracts, forward delivery contracts, guaranteed investment contracts, securities and other instruments with embedded derivatives (such as structured notes), and other special situation derivative instruments.

Cadwalader also combines securitization and derivatives technologies to structure and develop products tailored to achieve specific client objectives, including programs to insure swap portfolios, loop debt defeasance structures, and other diverse products.

We represent various dealers in connection with their swap trust asset repackaging programs and also act as counsel on numerous derivative business combination transactions involving "joint ventures" between derivatives dealers and credit enhancers, insurer "wraps" of derivatives dealers' derivative books and development of "AAA" derivative subsidiaries.

In the area of municipal structured products, Cadwalader has been involved in the development and marketing of critical new products including the securitization of pools of unrated tax-exempt obligations (such as leases, multi-family housing and small business, industrial and commercial revenue loans), the first tax-exempt inflation-linked bond issuance and the first municipal defeasance restructuring swap transaction.


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