Course | Columbia Law School

This course is an introduction to some of the international financial transactions frequently encountered in contemporary practice. The course moves from simple to complex transactions, using as building blocks syndicated lending transactions, securities offerings, and derivatives transactions. It examines the way in which particular transactions that originate in a national market (typically London or New York) evolve over time and are changed to accommodate the complexities of dealing cross-border. In doing so, the course considers the regulatory and economic conditions of the markets in which these transactions first appear and the contents of typical transaction documents. The intent is to give students the opportunity to learn from exposure to commonly encountered transaction types and the regulatory environment in which these transactions are conducted.

We start with a general introduction to the regulatory framework within which the market participants (primarily banks and brokers) are carrying out their activities, including issues relating to capital adequacy, liquidity, and counterparty risk, which has been of particular relevance in the past year. We then consider the development of cross-border syndicated bank lending by examining the evolution of the euro-market for bank lending and the provisions of the model loan agreement developed by the U.K.'s Loan Market Association. After students become familiar with basic lending, we examine more complex lending transactions such as project financings.

The course examines securities offerings by studying the evolution of the Euro-markets for debt securities and considers how these markets are affected by relevant aspects of securities markets in the U.S. and the EU. Extracts from documents for the offering and sale of debt securities are discussed along with disclosure rules and due diligence considerations in the context of these transactions. We then go on to look at the offers and sales of equity securities. We also take a look at settlement systems and the delivery of legal opinions in the context of international financial transactions.

The course will introduce the concepts that underlie derivative transactions first by a review of a simple structured note product, and then by studying the economics underlying swap and option transactions and some standard forms developed by the International Swaps and Derivatives Association. We then study the evolution of synthetic financial products through credit default swaps and securitization transactions, including cash and synthetic securitizations, and other credit-linked products, with a particular eye on developments in those markets over the past year.

The course will conclude by touching on the structure of private equity funds, hedge funds, and other collective investment funds, what they are and what impact they are having on markets and international financial transactions (such as mergers and acquisitions).

Students will become familiar with some of the more important international financial transactions that they are likely to encounter in practice and the regulatory setting in which they are carried out, will explore the impact of globalization on markets, and will acquire a basic knowledge of the underlying concepts in the economics and drafting of documentation for these transactions. Because of the breadth of topics studied, depth on each particular topic in class is necessarily limited.