Spending the summer at the intersection of law and finance

From a very young age Penn State Law student Michael Gill, of the class of 2013, knew he wanted to be a lawyer, but he didn’t know what kind of lawyer until his first year of law school. One thing, however, that he was certain about was his interest in finance, so he decided to look for opportunities to use a law degree with a finance degree. This summer Gill is doing that as an intern at the Overseas Private Investment Corporation (OPIC), the U.S. Government’s Development Finance Institution that makes loans to projects in developing countries that also have a U.S. company nexus.

“My interest in finance carried over from my undergraduate days at the University of Richmond. I came to law school searching for a way to find a synergy between finance and the law,” said Gill. “What I discovered was a relatively new field called impact investing -- investing for social and environmental returns, not just financial returns."

While OPIC is not a true impact investor, its premise is similar. OPIC works with the U.S. private sector by providing financial assistance such as loans and guaranties, political risk insurance, and support for investment funds to help American businesses expand into emerging markets. In doing so OPIC generates revenues, jobs and growth opportunities at home and abroad while advancing U.S. foreign policy.

Gill is interning in the Portfolio Management Division (PMD), the branch of OPIC that monitors loans to development finance companies or projects. His work primarily involves contract compliance, financial analysis, and economic analysis.

“We monitor all the loans and their status after they have been made. PMD’s responsibility is to make sure that the loan remains in compliance with the covenants and terms of the loan agreement and to ensure that we get paid back,” Gill said.

While Gill’s work is heavy on the financial side, he explained that legal issues can arise quickly.

“When a borrower on a project defaults on their loan, often that means that they will ask to restructure their debt and that’s when it becomes very legal in nature. For example, is OPIC willing to waive the enforcement of certain terms so that they can get paid back eventually? At that point a Memorandum of Understanding is drafted that details the specific amendments to the contract,” he said.

Gill’s recent projects have included preparing Annual Loan Reviews (ALR) for a microfinance company in Romania, a nonprofit in Washington, D.C., and a desalination plant in Algeria.

“The purpose of the ALR is to analyze the risks to future repayment. We do balance sheet, cash flow, and economic analysis,” Gill said.

While reviewing balance sheets and auditor statements are par for the course, one project that Gill didn’t envision doing was translating a 22-page auditor statement from French to English for the Algerian desalination project.

“That was definitely outside the general call of duty, but a learning experience nonetheless. My internship with OPIC has been a fantastic opportunity and I really enjoy the work.”

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Last Updated July 31, 2012