Debt Capital Markets (LAWS70111)

Following the Global Financial Crisis (GFC), the once-heralded concept of securitisation quickly fell out of favour. A lack of trust and disclosure led to a surge in bondholder litigation and enforcement action from supervisors, which is still continuing. Investors explored virtually any available avenue to recoup losses. More recently, structured debt capital market products have made a comeback of sorts as investors hunt for yield. But the drivers and documentation have changed significantly over recent years, both due to the regulatory ‘waterfall’ as well as lessons learnt (some the hard way) in courts. The focus of this subject is distinctly practical. Real-life examples from international practice are discussed. The lecturer draws on his current experience and brings in guest lecturers from top international law firms as well as other disciplines, contributing to an interactive, challenging, flexible and overall rewarding subject.

This subject covers the law and practice of the international debt capital markets. It discusses the mechanics of the capital markets generally, explaining how these differ from the loan and derivatives markets. It covers the relevant actors and the (highly dynamic) legal and regulatory framework. There is emphasis in class on the legal and structuring aspects of actual capital market transactions, such as covered bonds, securitisations, (structured) bonds and hybrid transactions.

Restructuring of bond transactions (as evident in the recent sovereign debt crises) is a prominent feature. Consideration of financial markets litigation (involving investment banks, hedge funds, ratings agencies, derivative dealers and regulators) is another important aspect of the subject. Green and inclusive finance (through green bonds, some project bonds and microfinance securitisation) also features. Actual transactions, their structure, term sheet and documentation, are discussed in class, in order to provide students with a skill set that is applicable in legal practice and thus further enhance their legal prospects and careers.