A sponsor's hedging strategy is most effective when it is treated as an integral part of the financing process rather than as a last-minute execution item. The legal and regulatory landscape surrounding derivatives continues to grow in complexity, making early coordination among treasury, legal, financial advisors and hedge providers more important than ever.
This guide walks through the key practical and legal considerations for sponsors and corporates planning a hedging strategy in connection with debt financings, including ISDA documentation architecture (and the choice between the 1992 and 2002 forms), commonly negotiated provisions around overhedging, orphan hedge providers and refinancing, deal-contingent hedging and other pre-hedging structures, regulatory onboarding under EMIR and Dodd-Frank, and post-trade management. The commentary also highlights points of comparison across the London and New York markets.
