Shearman & Sterling advised Arion Bank hf. on its substitution as issuer under Kaupthing hf.'s ISK200 billion covered bond program. This involved the convening of four meetings of bondholders of all of the series of covered bonds issued by Kaupthing to date, as well as restructuring and amending the underlying program documentation.

Kaupthing went into special resolution process in November 2008 and the Icelandic government assumed control of it. This transaction is part of the process of resolving Kaupthing's financial situation. Arion is an Icelandic bank formed in late 2008 and certain assets of liabilities of Kaupthing were transferred to it at that time. Arion will now take over as issuer in place of Kaupthing under the covered bond program.

The Shearman & Sterling team of lawyers in the firm's London office included finance partner Julian Tucker, associate Melissa Gainsford and trainee solicitor Natalie Caldwell.

Shearman & Sterling already has a considerable track record of advising in the Nordic region. The firm recently advised the initial purchasers on Norwegian company Petroleum Geo-Services ASA's $300 million bond offering and Swedish paper manufacturer Munksjö on the acquisition of French paper manufacturer Arjowiggins' speciality paper business.