Allen & Overy says it is looking at alternatives to flip clauses

Monday, February 01, 2010

Allen & Overy has published a comment piece on last week’s US bankruptcy court ruling over the Dante series of CSOs arranged by Lehman Brothers

TAGS: Law suits

Comment by: Anonymous. Posted 14 years ago [2010-02-03 01:21:14]

Having read the A&O article is seems like the last line about "alternative ways to achieve the same effect" is A&O touting for business. There maybe things to do around the edges for cashd deals, but if there is a synthetic CSO where the swap becomes 70% in the money for the swap counterparty, how are they going to mitigate that risk ? The only way seems to be is if the swap counterparty themselves, cash collateralises the vehicle to that amount - a kind of bizarre reverse posting of collateral.

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