Negotiating Over-the-Counter Derivatives for Corporate Counterparties (Thomson Reuters)

In their recent Thomson Reuters article, Goodwin partners Andrew Henderson and John Servidio explain that many corporations use over-the-counter (OTC) derivatives to manage interest rate, foreign exchange (FX), and commodity price risks. Prior to engaging in any such hedging or risk-management transactions, a corporate end-user counterparty must review its credit documentation, obtain necessary authorizations, negotiate trading relationship agreements with their bank and dealer counterparties, and understand the accounting treatment for the proposed hedging transaction. Corporate counterparties should analyze the relevant trading, documentation, credit, and operational risks raised when evaluating a hedging program using OTC derivatives and consult with internal and external counsel as well as other professional advisers. This article highlights key issues and outlines important negotiation points for corporate end users of OTC derivatives when creating a hedging program to mitigate interest rate, FX, and commodity price risks.

Read the full analysis: “Negotiating Over-the-Counter Derivatives for Corporate Counterparties” (Thomson Reuters)

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