Our professionals have a detailed working knowledge of all ISDA forms and considerable experience analyzing, valuing, structuring, bidding and executing transactions involving a variety of derivative products. Given the general lack of transparency in the derivatives market, and the complexity and risks associated with derivative-based transactions, we strive to guide our clients through a deliberate and thorough process designed to ensure that the client is making fully-informed decisions and that all risks and idiosyncrasies of the contemplated transaction are thoroughly understood and appreciated prior to execution.
We strongly prefer competitive bidding of derivatives rather than negotiating terms with a predetermined financial institution. We conduct a thorough and open competitive bidding process in which all major business terms are established in advance and all appropriate potential counterparties are encouraged to compete.
Single Party Negotiations
In certain situations, a competitive solicitation may not be appropriate. In those cases, we seek to negotiate in advance a reasonable "spread to mid-market" taking into account fair market pricing for each component of the borrower's all-in rate (including execution and legal costs, credit reserves and the counterparty’s gross profit).
In our competitive solicitations, awards are typically made within a matter of minutes of receiving bids and no subsequent negotiations of terms are allowed. In general, we find that most of the major financial institutions like this approach and appreciate the level playing field and fast turnaround.
In our single party negotiations, we work hard to ensure that all transaction structuring and documentation is done well in advance of receiving definitive pricing from the counterparty. This helps to eliminate any last minute surprises while providing for the maximum number of rate verifications and independent valuations during the course of the negotiation.