Allen & Overy's 'Life after Lehman' Report Reveals Changes in Global
Financial Market Practice
Allen & Overy reports on how the global financial markets are taking a 'back to basics' approach
one year on form the collapse of Lehman Brothers.
(PRWEB) September 13, 2009 -- One year on from the collapse of Lehman Brothers the global financial markets
are taking a back-to-basics approach of cautious deal making and risk analysis, according to a report published
today by Allen & Overy.
The report, which surveys Allen & Overy partners in 20 countries around the world on changes in market
practices in their jurisdictions, indicates:
o a tightening of covenants in lending documentation;
o significant firming up of legal risk management practices both in banks and by regulators;
o increased emphasis on counterparty risk in capital markets structures, but with the preservation of sound
market conventions; and
o that in restructurings there has been an increase in the use of pre-packs and debt-for-equity conversions, as
well as disputes over valuation models.
In essence, people are negotiating harder and prudently assessing and managing their risks in a still uncertain
The full report is available to download here
The report was compiled by Allen & Overy Special Global Counsel Philip R. Wood QC (Hon) and shows that
while regulators and politicians continue to debate reform of the financial system, the market has responded to
recent events and is conducting business with a far more cautious approach to transactions and deals - albeit with
a greatly reduced flow of deals in some areas.
Commenting, Philip Wood said: "Our report indicates that, in addition to higher pricing and reduced leverage,
there has been a significant tightening up of the terms of legal documents. But recent events have not resulted in a
revolution in the coverage of the documents for syndicated credits or bond issues or a fundamental reappraisal of
"Legal risk management by