Shearman And Sterling

News May 03, 2017

Shearman & Sterling Advises Piraeus Bank on a Series of Bond Exchange Transactions

Shearman & Sterling advised Piraeus Bank S.A., the largest financial group in Greece by assets, loans and deposits, on a series of bond exchange transactions with the European Financial Stability Facility (“EFSF”) and the European Stability Mechanism (“ESM”). This comprised of floating rate notes, potentially at a total face value of €13.1 billion, to be exchanged over a period of approximately one and a half years. This Bond Exchange Measure involving the participation of Greek Banks forms an important part of the Liability Management Exercise (“LME”) endorsed on December 5, 2016 by the Eurogroup.

The LME involved a set of short term debt relief measures for the Hellenic Republic including the use of the EFSF and ESM funding resources to reduce interest rate risk for the Hellenic Republic without incurring additional costs. Under the LME, the Hellenic Republic requested that the EFSF reduce the Hellenic Republic’s interest rate risk profile in respect of the financial assistance disbursed under the Financial Assistance Facility Agreement between the EFSF, the Hellenic Republic, the Hellenic Financial Stability Fund and the Bank of Greece dated 15 March 2012. This was undertaken by way of exchanging any floating rate notes supporting the recapitalisation of Greek banks that are currently held with cash or with fixed rate notes with longer maturity (the “Bond Exchange Measure”).

Shearman & Sterling not only advised Piraeus Bank in connection with the negotiation, formulation and completion of all legal documentation relating to the Bond Exchange Measure but also provided a highly integrated advisory role on all aspects of this transaction including holding the pen and consolidating views and comments from all parties including the other Greek banks.

The Shearman & Sterling team below included partner Apostolos Gkoutzinis; and associates Melanie Probst and Iakovos Anagnostopoulos.

The Team