Derivatives and
Structured Products

Our equity derivatives practice is world class. The high position of leadership staked by this practice has allowed us to work with every major financial institution in this area. We also regularly represent corporations, hedge funds and individuals as users of equity derivatives.

This work effectively mobilizes Davis Polk's skills across a wide range of disciplines – securities law, tax, credit, bankruptcy, employee benefits, asset management, broker-dealer and bank regulation, litigation and ERISA. With a highly integrated approach to both over-the-counter products and equity-linked securities, we provide comprehensive advice with respect to every aspect of complex equity derivatives transactions. Our lawyers have helped to create many of the key structured equity products in use today and we remain at the forefront of innovation.

Recognition

  • Chambers USA – Band 1 among law firms nationwide in equity derivatives, 2011

  • Risk magazine – “Derivatives Law Firm of the Year,” 2010

Notable Matters

  • Ford Motor Company ($2.875 billion). We advised Ford Motor Company on its SEC-registered offering of senior convertible notes.

  • ArcelorMittal ($2.25 billion). We advised the underwriters on the offering of mandatorily convertible notes by ArcelorMittal, the world's leading integrated steel and mining company. The offerings were part of ongoing initiatives by ArcelorMittal to lower its net debt and accelerate the achievement of its medium-term net debt target.

  • Allied Irish Bank ($2.1 billion). We advised the lead managers on an offering of contingent mandatorily exchangeable notes by Allied Irish Bank. Subject to shareholder approval, all of the notes will be mandatorily exchanged for shares of common stock of M&T Bank.

  • Intel ($2 billion). We advised the underwriters on a Rule 144A offering of junior subordinated convertible debentures by Intel.

  • China Unicom (Hong Kong) Limited ($1.84 billion). We advised the initial purchasers on a Regulation S offering of convertible bonds by Billion Express Investments, a subsidiary of China Unicom (Hong Kong), a Hong Kong- and New York-listed telecommunications service provider in China. This transaction was the largest international convertible bond issue by a PRC company.

  • Ford Motor Company ($1.8 billion). We advised Ford Motor Company on its SEC-registered offering of warrants by the UAW Retiree Medical Benefits Trust. This transaction was via modified Dutch auction, the first since the U.S. Treasury sales of TARP warrants began.

  • Banco do Brasil ($1.75 billion). We advised the initial purchasers on a $1 billion offering and $750 million reopening of Tier 1 perpetual non-cumulative junior subordinated securities by Banco do Brasil, the largest bank in Latin America in terms of total assets. This transaction was the first issuance ever by a Latin American bank of Tier 1 capital securities structured to comply with the expected implementation of Basel III.

  • Microsoft ($1.25 billion). We advised the initial purchasers on a Rule 144A offering of zero coupon convertible senior notes by Microsoft. We also advised counterparties to capped call transactions with Microsoft in connection with the convertible senior notes offering. The transaction is the first “AAA”-rated convertible since 2002, the first zero coupon/zero discount convertible since 2005 and represents the largest market cap ever in the convertible market.

  • Yahoo! ($1.25 billion). We advised the initial purchasers on convertible senior notes offering by Yahoo!, a global technology company that provides a variety of products and services, many of them personalized, including search, content, and communications tools.

  • Morgan Stanley ($950 million). We advised Morgan Stanley on its agreement with the U.S. Department of the Treasury to repurchase the warrant previously issued to the U.S. Treasury pursuant to the TARP Capital Purchase Program.

  • Lam Research ($900 million). We advised the joint book-running managers on a Rule 144A offering of convertible senior notes by Lam Research, a leading supplier of wafer fabrication equipment and services to the worldwide semiconductor industry.

  • Ares Capital ($805 million). We advised the initial purchasers on offerings of convertible senior notes by Ares Capital, a California-based global alternative asset manager and investment adviser.

  • AngloGold Ashanti ($733 million). We advised the joint bookrunners on a Rule 144A/Regulation S offering of convertible bonds by AngloGold Ashanti Holdings Finance, a subsidiary of AngloGold Ashanti, a South African global gold company.

  • Novellus Systems ($700 million). We advised Novellus Systems, a leading provider of advanced process equipment for the global semiconductor industry, on its Rule 144A offering of senior convertible notes.

  • Stanley Black & Decker ($633 million). We advised the joint bookrunners on an offering of convertible preferred units by Stanley Black & Decker, a diversified global supplier of hand tools, power tools and related accessories. This transaction was the first-ever offering of convertible preferred units with the units receiving 50% equity credit from Moody’s and “qualitative consideration” from S&P without affirmatively committing Stanley Black & Decker to diluting its common stockholders; and was named “2010 Americas Structured Equity Issue of the Year” by International Financing Review

  • Medicis Pharmaceutical($500 million). We advised the underwriters on an SEC-registered offering of convertible senior notes by Medicis Pharmaceutical, an independent specialty pharmaceutical company. In addition, we advised the counterparties to convertible note hedge and warrant transactions with Medicis in connection with the convertible senior notes offering.

  • Westar Energy ($500 million). We advised Westar Energy, the largest electric utility in Kansas, on its dribble-out offering of common stock and concurrent execution of forward-sale agreements. This transaction was the largest (and only the second) such offering to incorporate an equity-forward component.

  • Synovus ($345 million). We advised Synovus, a Georgia-based financial institution, on its offering of tMEDS, each comprised of a prepaid stock purchase contract and a subordinated amortizing note. This transaction was the second-ever public offering of units, each comprised of a prepaid variable share forward purchase contract and an amortizing note.

  • Telvent ($200 million). We advised the initial purchasers on a Rule 144A offering of senior subordinated convertible notes by Telvent, an IT solutions and information services provider headquartered in Madrid, Spain. This transaction was the first (and to date only) Rule 144A convertible offering by a Spanish issuer listed in a U.S. national exchange.