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Email Derivative product companies (“DPCs”) are structured financial entities that act as intermediaries for, or guarantors of, an affiliated entity (the “Sponsor”) under interest rate or FX derivatives with a non-affiliated counterparty (a “Counterparty”). In a typical intermediation structure, a DPC will enter into a trade with a Counterparty and simultaneously enter into an offsetting mirror transaction with the Sponsor. In such manner, the DPC hedges its market risk while retaining the credit risk of its Counterparty. https://www.cadwalader.com/resources/clients-friends-memos/derivative-product-companies-a-comparison-of-new-rating-agency-guidelines