Shearman And Sterling

News December 11, 2015

Shearman & Sterling Advises Piraeus on its €4,933 million Recapitalization

Shearman & Sterling advised Piraeus Bank S.A. (“Piraeus”) —the largest financial group in Greece by loans— on its recapitalization (the “Recapitalization”) under the 2015 Comprehensive Assessment (the “2015 Comprehensive Assessment”) conducted by the Single Supervisory Mechanism (the “SSM”), together with the Greek supervisory authorities, under the Memorandum of Understanding of the Third Economic Adjustment Programme for Greece in the framework of the recapitalisation of the Greek banks.  The 2015 Comprehensive Assessment comprised an asset quality review and a forward-looking stress test, including a baseline and an adverse scenario, under which the capital requirements of Piraeus were determined to be €2,213 million and €4,933 million, respectively.

The Recapitalization consisted of: (i) a €1.34 billion equity offering led by Credit Suisse, Deutsche Bank and UBS as joint global coordinators (the “Offering”), (ii) a liability management exercise in the amount of €602 million in which Piraeus issued new ordinary shares for certain outstanding debt securities (the “Liability Management Exercise”) and (iii) certain mitigating actions (including the Liability Management Exercise) approved by the SSM on 13 November 2015 (the “Mitigating Actions”).  In the context of the Recapitalization, Shearman & Sterling also advised Piraeus on regulatory matters, including in connection with the Bank Recovery and Resolution Directive.

The Offering, together with the Mitigating Actions (including the Liability Management Exercise), met the €2,213 million capital requirement under the baseline scenario of the 2015 Comprehensive Assessment and involved solely private investor participation.  The remaining capital requirement towards the €4,933 million under the adverse scenario of the 2015 Comprehensive Assessment will be covered through the issuance of new shares to the Hellenic Financial Stability Fund (for 25% of the remaining capital need) and contingent convertible securities (for 75% of the remaining capital need).

The Shearman & Sterling team below included partner Apostolos Gkoutzinis; counsels Azad Ali and Kolja Stehl; associates Dora Athanasiadou, Ana Stefanovic Grbec, Arthur Ravignon, Georgina Leonidou,  Ankita Sethia, Ellie Teo, Aysuria Chang, Inyoung Song and Sarah Moir-Porteous; and trainees Michael Skouras, Joelle Wong, Christopher Hobson, Kyle Koh, Jodie Reindorf and Sharzad Shini.

The Team