Manuel S.
Frey

A partner in our Finance Group, Manuel Frey is Global Head of Derivatives. Manuel focuses on a broad-based cross-border OTC derivatives, structured products and hedge fund practice. He is closely involved in the structuring, negotiation and execution of derivative, synthetic and financing products and structures and the resolution of related credit, regulatory, legal and risk management issues. He also regularly assists the M&A, capital markets, litigation, bankruptcy and finance teams with derivatives aspects of acquisitions, financing transactions and corporate restructurings. Manuel represents investment funds, corporate end-users and global financial institutions in the design and negotiation of OTC derivatives products and transactions including equity, credit, FX and fixed income products. He also counsels clients on the interpretation and implementation of various derivatives-related aspects of the Dodd-Frank Act and the changes to documentation and trading practices occasioned by the ongoing regulatory reforms.

Manuel has extensive experience negotiating and implementing OTC derivatives transactions and comprehensive derivatives documentation infrastructures, including ISDA Master Agreements and collateral arrangements, derivatives clearing documentation, repurchase agreements, master confirmation agreements, give-up agreements, prime brokerage relationships, distressed debt trading documentation and participation agreements from both the dealer and end-user perspectives.

Manuel’s derivatives and structured products experience includes:

Synthetic Financings

• Repo-Based Asset Financing – Representation of major private equity funds and opportunistic hedge funds in the financing of loan and bond asset acquisitions and holdings through the use of repurchase agreements.
• Acquisition Finance Through Total Return Swaps – Representation of a large private equity fund in the structuring and negotiation of total return swaps and other bespoke synthetic instruments used to finance acquisition of portfolio company indebtedness and equity.
• Synthetic Warehouse Financing – Representation of a global financial institution as swap provider under synthetic warehouse facilities in form of loan total return swaps to extend leverage and/or bridge financing to investment funds and CLO sponsors.
• Synthetic Leveraged Financings Through Total Return Swaps – Representation of distressed opportunities investment funds in the monetization of large bankruptcy claims portfolios, single-borrower loan positions and swap portfolios with continued synthetic exposure to the underlying asset positions through total return swap transactions.
• Synthetic Risk Transfer/Regulatory Capital Relief Transactions – Advise investment funds as protection sellers in SRT regulatory capital relief transactions involving credit-linked note and credit default swap structures.
• Total Return Swaps and Repurchase Agreements on Repackaged Notes – Representation of investment funds in the structuring and negotiation of a repackaged total return swap or repo-based financing facilities to obtain secured credit against existing loan and bond portfolios, including structures involving the formation of bankruptcy-remote special purpose vehicles to borrow, maintain synthetic exposure to the reference portfolio and continue to control voting rights over the loans and bonds.
• Structured Loans Secured by Distressed or Illiquid Assets – Representation of a major U.S. bank as lender in the structuring and negotiation of full recourse loans to hedge funds secured by bankruptcy claims, equity positions, commodities, loans and other distressed or illiquid asset pools and supported by credit default swap protection.
• Spin-off of Proprietary Trading Platform and Creation of Hedge Fund – Representation of the global principal strategies division of a U.S. broker-dealer in the spin-off from the broker-dealer and establishment of an independent hedge fund, including the negotiation of total return swap and repo-based asset transfers, financing agreements, establishment of a prime brokerage, give-up and derivatives trading infrastructure and ongoing trading advice.
• Committed Repo Facilities – Representation of major financial services company in entering into committed reverse repo facilities with a syndicate of global systemically important banks (GSIBs) using a portfolio of US Treasury securities pledges as collateral to provide liquidity backstop facilities supplementing existing credit lines and to ensure reliable, available access to necessary liquidity to support borrowing needs in the event of severe disruptions in the capital markets.

Equity Derivatives

• Accelerated Share Repurchase Transactions – Representation of issuers in collared and uncollared accelerated share repurchase transactions through forward contracts.
• Equity Collar Hedge – Representation of investment funds in the structuring of equity collar transactions to hedge concentrated stock positions including securities lending arrangements and borrowing facilities relating to the underlying put and call options.
• Convertible Note Hedges – Representation of U.S. and foreign investment banks and issuers in structuring and negotiating call spread transactions, capped calls and share lending arrangements in connection with convertible note issuances. Representation of sellers and acquirors in negotiated unwinds of note hedge and warrant trades and capped calls in connection with make-whole fundamental change transactions.

Credit Derivatives

• CDS Advice – Representation of numerous buy-side firms in their analysis and advocacy regarding actual and potential credit events and succession events including Caesar’s, Hovnanian, iHeart Communications, McClatchy, Sears and Windstream, and participation in ISDA working groups considering amendments to the Credit Derivatives Definitions and DC Rules framework in connection with “narrowly tailored credit events.”
• Accounts Receivable Puts – Representation of suppliers and hedge funds in the negotiation of default protection agreements referencing various distressed companies, consisting of options to put accounts receivable claims to the protection seller in a bankruptcy of the reference entity and related claims transfer agreements.
• Synthetic Risk Transfer/Regulatory Capital Relief Transactions – Representation of investment funds as protection sellers in SRT regulatory capital relief transactions involving credit-linked note and credit default swap structures.
• CDS on CDO Litigation – Representation of a major U.S. bank as defendant and counter-plaintiff in a breach of contract action under a credit default swap on collateralized debt obligations with pay-as-you-go or physical settlement.

Derivatives Trading and Regulatory Advice

• Cryptocurrency Trading Advice – Representation of investment funds and high net worth individuals in the negotiation of cryptocurrency derivatives trading documentation, collateral agreements, execution and custodial arrangements and related regulatory analysis.
• Deal-Contingent Acquisition Hedging – Representation of private equity and hedge funds regarding foreign exchange and interest rate exposure in connection with offshore acquisitions and dispositions, UK take-privates, non-USD investor contributions and financial covenant compliance, and negotiation of deal-contingent trading platform documentation required to implement related strategies.
• OTC Derivatives Trading Documentation Infrastructure – Representation of large and medium-sized hedge funds, private equity funds and hybrid investment vehicles in the structuring, negotiation and implementation of the comprehensive suite of derivatives trading documentation (ISDA Master Agreements, collateral agreements, Futures Account Agreements and derivatives clearing documentation, repurchase agreements, prime brokerage, master confirmation agreements, securities lending, give-up arrangements and related documentation) and provision of specific trade-related analysis and advice.
• Swaps Regulations Compliance – Representation of U.S. and non-U.S. financial institutions and corporate clients in the analysis, implementation and compliance with Dodd-Frank, EMIR and other derivatives regulations, including the cross-border application of CFTC swap regulations, clearing and reporting obligations, swap dealer/major swap participant registration and uncleared swaps requirements.
• Interest Rate, Commodity Price and FX Hedging Platforms – Representation of swap providers and borrowers in connection with requisite and discretionary interest rate, commodity and FX hedging transactions under syndicated secured loan facilities and project financings and negotiation of related trading platform documentation.
• Energy and Commodity Transactions – Representation of power provider in the negotiation and structuring of derivatives and financing transactions involving carbon emissions rights, electricity transmission and other offtake agreements.

Derivatives and Bankruptcy

• Derivatives and Bankruptcy – Representation of the steering committee of first lien lenders of Texas Competitive Electric Holdings Company LLC (TCEH) in connection with TCEH’s outstanding interest rate and commodity swap portfolios and related swap claims trading issues.
• Claims Trading Advice – Representation of major U.S. bank as market maker in the Lehman and Eastman Kodak bankruptcy claims trading secondary markets. Representation of the bank in its acquisition of approximately $8 billion in claims against Westinghouse Electric Company, LLC and its affiliates, and approximately $2 billion in related guarantee claims against non-debtor Toshiba Corporation, and subsequent participations and assignments of the claims to a creditor consortium.
• Insolvency Strategic Advice – Representation of Citibank NA and its broker-dealer and unregulated affiliates in connection with the resolution of their derivatives claims portfolio in the Lehman Brothers, Chrysler and MF Global bankruptcy proceedings.

Manuel speaks and writes frequently on various topics. He authors the USA chapter of the International Comparative Legal Guide (ICLG) to Derivatives. Since 2014, Chambers USA has recognized Manuel in Derivatives, in which observers singled out his ability to explain the complex nature of derivatives in a way that non-experts can understand and describe him as “exceptionally skilled, knowledgeable and practical.” He also has been continually recognized in Chambers Global Capital Markets: Derivatives since 2014 for his work in derivatives, and by The Legal 500 as a leading lawyer for his work in structured finance.