Pre-financial crisis, interest rate derivatives were widely recognized as a valuable part of the municipal issuer’s financial toolkit. Post-crisis, they have been a thorn in the side of many issuers, resulting in expensive litigation with failed swap providers – most notably the Lehman and Ambac derivatives trading subsidiaries – and public criticism of municipal issuers said to have fallen prey to more sophisticated providers.
USA, Derivatives, Insolvency & Restructuring, Litigation, Orrick, Herrington & Sutcliffe LLP, Bankruptcy, Swap (finance), International Swaps and Derivatives Association, Lehman Brothers