GROUP # 1

Seatwork (August 6, 2014)

1. What is your understanding of corporate finance?Corporate finance is the business of getting money from those who have it to lend

or invest to companies that can put the money to work. Corporate finance is also about how the company will live with its financial agreements, and when and how the banks and investors will get their money back.

2. What are your expectations in this class?Being enrolled in the course/subject corporate finance, we expect to be equipped

with the knowledge and understanding of the field as a whole: its dynamics, relevance and processes. We also want to gain an insight about it much more possibly both in the micro and macro perspectives.

Since the field of corporate finance is so encompassing as to deal with all the moneymaking aspects of firms or businesses, it is important that as students of this course, we will be familiar with it both from a micro and macro perspectives, its complexities and basic principles.

From the micro perspective, it would be important that we get acquainted with how companies arrive at financial decisions and the possible consequences of such decisions. The principles involved in finance, investment and profits are equally important to learn. The success/failure of the businesses, the dynamics involved in such; both globally and domestically are also essential to have a grasp on.

On a macro-level, as law students, it would be of utmost importance to know the interplay of the business sector and the government. Hence, we want to grasp some ideas on the legal underpinnings involved in corporate finance; that would range from governing laws, industry standards set by government institutions, agencies involved in implementation of these laws, as well as violations and prohibited acts under existing laws and conditions.

New trends in corporate finance, specifically brought about by globalization and other economic issues, should also be tackled. Controversies which may pertain to corporate finance, ethical dilemmas and the emergence of new markets and opportunities is also relevant to be looked at, most specifically in light of the Philippine experience and situation.

3. How do you expect your expectations to be met?Given the above-mentioned expectations, a simple yet thorough explanation of the

concepts and the subject matter would be of great help, given the fact that corporate finance is such a broad, yet intricate field of study.

Case studies, actual cases with the application of the laws on corporate finance would also be another way to create a much better understanding among students. In such a way, illustrations are a better way of facilitating learning rather than just simply anchoring on the theoretical definitions. Real situations through case studies and actual cases are more practical. Updates on laws and jurisprudence are also of great importance.

On the same hand, equipping students with the best possible understanding of how the finance thing works would serve as a foundation for us to get by with the field of corporate finance. We also hope as students that we be guided on the interplay of the business sector, the government and the public as a whole. The interaction they have with another, as well as their contribution to the society as a whole should also be looked into.

4. Who are the players in corporate finance and how do these players interact in running the financial market?

The players in “corporate finance” are (1) Investors and Intermediaries, (2) Banks and Other Lenders in the Bank Loan and Private Placement Markets, (3) Exchanges, Regulators and Industry Associations and (4) Ancillary Players such as Providers of Trustee and Administrative Services, Rating Agencies, Accountants and Financial Printers.

The mentioned players have provided for their own systematic way of connecting with the services that other players supply. They complement each other in terms of laying out the process and cycle of running the financial market.

5. As a player in corporate finance, what is the role of a lawyer in corporate finance? Of all these roles, identify one role that your group believes is the most important and why?

The role of the corporate finance lawyer is to represent companies, banks and investors, and various and sundry other partie-intermediaries, sponsors, trustees – in corporate finance matters. Corporate finance lawyers also help their clients get deals done that is, to closing. But they are also expected to assist and advise their clients after closing. After closing, lawyers get questions about how to interpret financial agreements and additional queries concerning clients’ rights and obligations. Corporate finance lawyers also work on corporate finance documents such as loan agreements or indenture and does the interpretations of the terms of the contracts.

As for the group, we feel that the last task, which is the interpretation and understanding of the term of the contract is the most important of all. We said so for where the terms of the contract come from, which ones are essentially fixed or given and will be demanded by the market, which ones are negotiable. It is also important to know which terms are most likely to have operational effect in the future and thus will matter most in hindsight.

6. Finally, in the current Philippine economic conditions, cite one economic issue where a corporate finance lawyer will be most helpful. Why? And how?

One major issue where a corporate finance lawyer can be most helpful is in addressing the growing unemployment rate in our country.

Corporate finance deals with mergers and acquisitions, companies buying other companies, and equity fundraising by selling of shares of stock. The clients of corporate finance lawyers are usually large companies or banks.

One major trend in the Philippine economy is the relation between the stock market and the creation of more job opportunities in the country. When the prices of the stock go up, that means more foreign investors, or, at least, more foreign currency, are being invested in the Philippine stock market. More foreign investors means more job opportunities can be created.

In addition, foreign companies would be most likely to invest in our country if they can utilize the expertise of our corporate finance lawyers, without the need for bringing in their own legal team. Aside from the fact that foreigners cannot practice law in our courts, the effort alone to have a foreign legal team familiarize themselves with our laws is tremendous. It would be best to bring in someone who is already familiar with our local laws, and who can aptly protect their corporation’s interests.