Debt Trading

The debt trading group of Morrison & Foerster LLP is a full-service practice devoted to representing clients engaged in secondary market trading of commercial loans, claims, and other debt assets.

Natural Strengths & Assets

• Our clients include investment banks, commission brokers, commercial banks, fund and asset managers, hedge funds, and other investors in commercial loans.
• Representation of these clients is focused on three general types of trading activities: trading distressed debt; trading par debt; and transfers of portfolios of debt assets (e.g., pursuant to auctions or securitization transactions).
• Although the majority of our work involves loans owed by U.S.-based corporations, we represent several clients in connection with trades of loans and claims owed by European, Latin American, Asian, and other foreign obligors.
• Our debt trading practice is conducted primarily by members of the firm’s Financial Transactions Group, which includes attorneys with expertise in the areas of banking, securities, structured finance, and derivatives.
• Attorneys in the firm’s insolvency, tax, ERISA, securities, and other groups are familiar with the unique issues arising in connection with debt trades, and assist with trading matters as needed.

Morrison & Foerster’s Experience

The firm’s relevant experience includes, for example:

• Providing regulatory advice regarding bank, securities, and investment adviser issues to banks, brokers, and other regulated institutions that engage in loan trading;
• Structuring investment funds and debt trades to comply with “prohibited transaction” rules under ERISA;
• Advising clients regarding credit documentation and related transfer documentation, collateral securing debt, bankruptcy court filings, and workouts and restructurings;
• Advising clients regarding fraudulent conveyance, preferential transfer, lender liability, and disgorgement risks; and
• Resolving disputes arising from failed trades.

In addition to the foregoing experience and services, we are an active member of the trade association for the debt trading industry (the Loan Syndications and Trading Association), and several attorneys in the group regularly participate in committees established by the LSTA to promote the liquidity and efficiency of the market.