HETA Asset Resolution AG: GÖRG advises creditor pool in connection with the repurchase of HETA debt instruments

07.09.2016

[Berlin/Cologne, ] On 6 September 2016, Kärntner Ausgleichszahlungsfonds (KAF) issued a public tender offer for the repurchase of approximately EUR 10.8 billion worth of outstanding debt instruments issued by HETA ASSET RESOLUTION AG (HETA) pursuant to § 2a of the Austrian Financial Market Stability Act (FinStaG). The repurchase offer is based on the memorandum of understanding (MoU) entered into in May 2016 by creditors of HETA and the Republic of Austria. Since the signing of the MoU, the necessary statutory basis for the repurchase offer was approved by the Federal Republic of Austria and the Province of Carinthia. In addition, a state aid law review of the transaction was performed by the European Commission by way of a so-called notification proceeding. The transaction documentation was prepared concurrently.

In the context of the repurchase offer, creditors of HETA may opt until 7 October 2016 for a cash repurchase of HETA debt instruments in the amount of 75 % (for senior HETA debt instruments) and 30 % (for subordinate HETA debt instruments) or the conversion of HETA debt instruments into zero coupon bonds that are to be newly-issued by KAF. The zero coupon bond will be secured by a federal guarantee. In addition, KAF has offered to repurchase the zero coupon bond at a fixed repurchase price set out in the offer and amounting to about 90 %. Further details on the terms of the tender offer are available at http://kaerntner-ausgleichszahlungsfonds.gv.at. A condition for the success of the tender offer is its acceptance by the majorities of HETA creditors provided for under § 2a of the FinStaG (acceptance of the tender offer by 66.66 % of all creditors and 25 % of each creditor class).

The parties to the MoU include a large majority of the members of the par investor pool, who also supported the tender offer by providing so-called support undertakings toward the Republic of Austria and KAF. The par investor pool was advised on the negotiations of the MoU (see press release dated 19 May 2016), on the implementation of the MoU and in connection with the tender offer by GÖRG Partnerschaft von Rechtsanwälten mbB (GÖRG) in cooperation with Austrian law firm Dorda Brugger Jordis Rechtsanwälte GmbH (DORDA), Vienna. The speaker for the pool is Dexia Kommunalbank Deutschland AG, which is the largest single creditor in the pool and holds claims totalling EUR 395 million. In the course of negotiating and implementing the MoU, the members of the par investor pool consulted intensively with other creditor groups and their advisors.                                                                                           

The creditors in the par investor pool (banks, in particular mortgage-lending institutions, insurers, asset managers and public corporations), which is organised in the pool under a pool agreement, hold about EUR 1.5 billion in bonds and Schuldschein loans issued by HETA and its legal predecessor in the years 2002 to 2007. Alongside HETA, the Province of Carinthia and/or Kärntner Landesholding are liable for the claims of the creditors on the basis of a statutory liability guarantee.

GÖRG already oversaw the formation of the creditors into a pool and, together with DORDA, advised the par investor pool on the collective defence of its rights in Austria in “objection” appeal proceedings brought there against the moratorium imposed by the Austrian Financial Market Authority on 1 March 2015. In addition, GÖRG acted for the par investor pool to bring an action for payment in the amount of about EUR 940 million before the Frankfurt Regional Court on 15 July 2015 (see press release dated 15 July 2015). This action was stayed in the context of the MoU. GÖRG and DORDA further supported the par investor pool to coordinate with additional creditor groups and to enter into a so-called lock-up agreement (see press release dated 17 December 2015).

Advisors to the par investor pool

GÖRG Partnerschaft von Rechtsanwälten mbB
Dr. Roland Hoffmann-Theinert (Lead Advisor), Partner, Banking/Corporate, Berlin/Frankfurt
Dr. Christian Bärenz, Partner, Restructuring, Cologne
Dr. Yorick Ruland, Partner, Banking, Cologne
Dr. Jens-Dietrich Mitzlaff, Partner, Banking/Finance, Frankfurt
Dr. Anne Laspeyres, Associate, Restructuring/Project Management, Cologne

Cooperation partner in Austria DORDA BRUGGER JORDIS Rechtsanwälte GmbH, Vienna
Dr. Andreas Zahradnik, Partner, Banking/Corporate
Dr. Bernhard Müller, Partner, Administrative Business Law
Mag. Christoph Hilkesberger, Associate, Banking/Corporate
Dr. Stephan Steinhofer, Associate, Litigation

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