© 2013 The Texas Lawbook.
By Brooks Igo
Staff Writer for The Texas Lawbook
Sidley Austin continues to grow its Houston office with the addition of Herschel Hamner as a partner in its global finance practice group. The Houston office, which opened in February 2012 with seven attorneys, now was 28 attorneys.
Hamner, who joins Sidley from Baker Botts, focuses his practice on syndicated bank financings. He anticipates doing more arranger-side work and working on more financings involving private equity funds and portfolio companies.
“Sidley’s Global Finance group is very highly regarded, and consistently ranks among the top U.S. law firms in terms of deal volume on both the arranger and borrower sides of syndicated lending transactions,” he said. “I was eager to join a group with such a strong reputation in the marketplace.”
The Harvard Law School graduate says corporate clients will need to continue to focus on compliance with the Dodd-Frank Act. Hamner says one area of particular importance to his practice is to address situations where a borrower has subsidiary guarantors under its credit facility that guarantee swap obligations in addition to the loan obligations.
“Pursuant to the Dodd-Frank Act (and based on a no-action letter issued by the CFTC), any guarantor of swap obligations is required to be an “eligible contract participant” under the Commodity Exchange Act,” he said. “If a guarantor does not meet the criteria to be an eligible contract participant, its guarantee of the swap obligations would be illegal and unenforceable, and there could be other ramifications as well.”
Additionally, Hamner says because lenders are increasingly focused on compliance by their borrowers with the Office of Foreign Assets Control (OFAC) rules and similar regulations of foreign jurisdictions, borrowers can expect more expansive representations and warranties and covenants in their loan agreements relating to those matters.
One of the most challenging deals Hamner said that he has worked on was a first lien/second lien financing that he led as an associate at Baker Botts for an oil and gas borrower client. Hamner and his team didn’t get started until the beginning of December after their client found out that it had won the bid for the target company. They had to negotiate documentation for two brand new fully-secured credit facilities in less than one month because the deal had to close by Dec. 31 for tax-related reasons. To complicate matters, the target company was in bankruptcy, which added another layer of issues to contend with.
“I think the only day I had off that December was Christmas Day,” he said. “We ended up signing documents in the middle of the night on Dec. 30 so that we could fund first thing on Dec. 31.”
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