Mandates / MERIDIAN STRUCTURING

We take instructions from principals and from their advisers. This page sets out what we need in order to start, what happens in each phase, what it costs, and who owns the result.

The brief

A mandate opens on four inputs. Three of them the client has. The fourth is usually the reason the client is here.

The exposure. What the client is carrying, on what measurement basis, and where it sits in the accounts today. A number and a note reference is sufficient at this stage.
The objective. What the client wants to be true at the end, stated as an outcome rather than as an instrument. Clients arriving with an instrument already named have performed the characterisation themselves, and we will perform it again.
The constraints. Regulatory, contractual, ratings, covenant, reputational and calendar. Constraints are not obstacles to the design; they are its specification, and a mandate with no stated constraints is a mandate we cannot price.
The counterfactual. What happens if nothing is done, quantified. The fee is a share of the difference between the counterfactual and the outcome, and a client who has not computed the counterfactual has not yet decided to buy anything.

We do not require the client to tell us what the underlying conduct, product, dispute or liability is. We require the exposure, its measurement basis and its timing. Many mandates run to delivery without the firm being told the substance, which narrows the scope of the file and the privilege question, and does not impair the design.

Phases

Phase	Output	Business days	Fee
1. Intake	Conflicts clearance, scope, counterfactual agreed in writing	5	40,000
2. Feasibility	Exposure map and a written statement of whether the objective is reachable	15	120,000
3. Design	Term sheet, tranche structure, counterparty construction, characterisation	40	380,000
4. Documentation	Instrument documents, opinion, capital and accounting treatment memorandum	30	260,000
5. Delivery	Venue registration, first placement, failure design handover	5	60,000
	Total	95 business days, that is 19 weeks	860,000

The Intake fee is refunded in full where conflicts clearance fails, and in no other circumstance. Phase 2 concludes with a written statement, and in roughly one mandate in five that statement records that the objective is not reachable on the stated constraints. A mandate closing at that point has cost the client 160,000 against a completed engagement of 860,000. A written statement that an objective is not reachable is a deliverable and is charged as one.

Fees

The fixed fee is charged against the design. The participation is charged against the result.

Item	Basis	Amount
Design fee	Fixed, by phase, payable on delivery of each output	860,000
Reference benefit, year one	Counterfactual less the client’s position after delivery	140,000,000
Participation	25 per cent, within the standing range of 20 to 33 per cent	35,000,000
Total consideration, year one	Fixed fee plus participation	35,860,000
Fixed fee as a share of total	860,000 divided by 35,860,000	2.4 per cent
Participation, years two onward	Not charged	Nil
Exclusivity, twelve months	Structure not offered to a competitor	Available
Exclusivity beyond twelve months		Declined
Our position in structures we design		Nil

Participation is measured on year one only and is calculated against the counterfactual agreed at Intake, before the work begins. Clients frequently propose that the counterfactual be settled at delivery instead, once the benefit is known. We decline. The counterfactual is a factual baseline, is fixed before the work begins, and is thereby removed from the fee discussion entirely.

Opinions

Where the objective depends on a treatment, that treatment is supported by a written opinion at the level the client selects. The levels are the standard levels and are recognised by every adviser to whom the client will show them.

Level	Assertion	Fee	Availability
Will	Substantially certain of the treatment	460,000	Declined on bespoke structures
Should	Approximately 70 to 75 per cent likelihood	240,000	Available
More likely than not	Above 50 per cent	110,000	Available
Substantial authority	Approximately 40 per cent, with authority cited	45,000	Available

On selection. The level is selected by the client on advice, and the selection turns on the treatment sought, the disclosure position and the client’s own risk appetite rather than on the fee. We will write any of the four and we will not write a level the analysis does not support, which is why the first is declined on bespoke structures: a construction with no precedent cannot be the subject of an opinion that a treatment is substantially certain. Opinion fees are additional to the design fee and are payable within Phase 4.</div>

Ownership

Foreground design. The structure as delivered, together with its documents, term sheet and treatment memorandum, is assigned to the client on payment of the Phase 4 fee. The client may use it, amend it, place it and license it onward without reference to us.
Background material. The method, the exposure taxonomy, the characterisation library, the counterparty construction patterns and the failure design template remain ours. They were ours before the mandate and they are used on every mandate after it.
Exclusivity. Where taken, the structure as delivered is not offered to a competitor of the client for twelve months from delivery. Exclusivity attaches to the structure, not to its components, and not to the background material.
Reliance. The opinion is addressed to the client. Third party reliance is available by reliance letter, per addressee, at 25,000. Reliance is not granted to a regulator, to a counterparty in a dispute, or to a purchaser of the instrument.
Failure design. Phase 5 includes handover of the failure design: who holds the structure when it does not perform, who explains it, what is recoverable and from whom. It is a fixed element of scope and is not removable at client request.