Debt Capital Markets

This subject is not offered in 2014.

Applicants without legal qualifications should note that subjects are offered in the discipline of law at an advanced graduate level. While every effort will be made to meet the needs of students trained in other fields, concessions will not be made in the general level of instruction or assessment. Most subjects assume the knowledge usually acquired in a degree in law (LLB, JD or equivalent). Applicants should note that admission to some subjects in the Melbourne Law Masters will be dependent upon the individual applicant’s educational background and professional experience.

The Melbourne Law Masters welcomes applications from students with disabilities. The inherent academic requirements for study in the Melbourne Law Masters are:

• The ability to attend a minimum of 75% of classes and actively engage in the analysis and critique of complex materials and debate;
• The ability to read, analyse and comprehend complex written legal materials and complex interdisciplinary materials;
• The ability to clearly and independently communicate in writing a knowledge and application of legal principles and interdisciplinary materials and to critically evaluate these;
• The ability to clearly and independently communicate orally a knowledge and application of legal principles and interdisciplinary materials and critically evaluate these;
• The ability to work independently and as a part of a group;
• The ability to present orally and in writing legal analysis to a professional standard.

Students who feel their disability will inhibit them from meeting these inherent academic requirements are encouraged to contact the Disability Liaison Unit: www.services.unimelb.edu.au/disability/

Following the Global Financial Crisis, the once-heralded concept of securitisation quickly fell out of favour. Investors since referred to the C-word for collateralised dept obligations (CDOs) as an area to stay clear of. A lack of trust and disclosure led to a surge in bondholder litigation and enforcement action from supervisors. Investors explored virtually any available avenue to recoup losses. Covered bonds rose to the occasion, facilitated by regulators in various countries, but are they here to stay and fill the void? More recently, securitisation, convertible bonds and structured products generally are making a comeback of sorts as investors hunt for yield. The focus of the subject is distinctly practical. Real-life examples from international practice are discussed. The lecturer draws on his extensive experience and brings in guest lecturers from a variety of backgrounds, adding to an interactive, challenging 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 markets. It also discusses 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 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. Actual transactions, their structure and documentation, are discussed in class, in order to provide students with a skill set that is applicable in legal practice and thus enhance their legal careers.

A student who has successfully completed this subject should:

• Be able to assess the commercial drivers for various debt capital market products
• Have developed a thorough understanding of structuring issues in these types of transactions
• Understand and be able to apply the general legal issues involved in these transactions along with a working knowledge of key documentation issues and pitfalls in practice
• Comprehend the legal risks in structured finance transactions and how to mitigate these
• Have developed a thorough understanding of the case law involving (structured) finance transactions generally.

• Class participation (10%)
• 8,000 word research paper (90%) (11 June) on a topic approved by the subject coordinator

Core subject materials will be provided free of charge to all students. Some subjects require further texts to be purchased. Details regarding any prescribed texts will be provided prior to the commencement of the subject.

This subject is not available as a breadth subject.