It’s been another one of those grey weeks. A swap counterparty in a securitisation is supposed to post collateral but there’s no CSA in place. Neither are there collateral accounts for that matter as the account bank agreement did not provide for any collateral accounts. Attempting to post would therefore only lead to a bigger mess. A bank holding several roles in a CMBS transaction was downgraded months ago, but parties still cannot decide which party will pay the Rating Agencies for the RAC. Or even which roles that RAC will cover. A bond issue has been dragging on for weeks now. You’ve been chasing people for comments to no avail. Is it ever going to close? And if all that wasn’t enough, a transaction you’ve been working on for months was supposed to close today but the signatories are unavailable. Angry emails are flying around…

Behind every legal or commercial cloud hanging over a transaction, there are differences of opinions between people: people who are chased by somebody else further up the chain of command and who, like you, really want nothing more than to be able to go back to their managers and say “This has now been resolved”.

So what is there to do? You can either choose to send back and forth a lot of lengthy emails to prove your point and to “win”. But this is destined to fail. Nevertheless, many lawyers choose to do this – after all they like to show off their “legal” skills. Or – more productively hopefully – you can just pick up the phone, and try, try your best, to listen to what the other party has to say and understand where they are coming from.

And if you choose to do the latter, it won’t matter whether you end up doing a simple side letter or a full blown amendment agreement. It won’t matter whether you open up new accounts or stick with the ones already in place but provide for ledgering of the collateral. And it certainly won’t make a huge difference whether you keep nagging on about that niggling point of legal semantics or just drop it to allow the transaction to close smoothly.

In the end, what matters is that you can both go back to those your managers – and most importantly your clients – and say “This has now been resolved”. And that’s a great silver lining.