Counsel to Greece
Since the Greek debt crisis broke in the late spring of 2010, we have been consulted regularly by both private and official sector institutions involved in the unprecedented European debt problems. This continued in 2011 as the Eurozone crisis escalated, with Greece calling upon our renowned sovereign practice in late July to advise in connection with a proposal announced at the July 21 summit.
Since July 2011 a dedicated team spanning eight offices has been international counsel to Greece on legal aspects of its external indebtedness culminating in the announcement on February 24, 2012 of a liability management transaction. As of the first expiration date of Greece’s exchange offer and consent solicitation, holders of over 85% of the approximately €206 billion Greek bonds invited to participate in the transaction had committed their support to the transaction. As a result of this liability management transaction, known as PSI, holders of Greek bonds will have provided in excess of €100 billion in debt relief to Greece and the average interest rates on Greece's remaining private sector debt will be materially reduced.
In addition to the PSI transaction, Cleary Gottlieb has acted as international counsel to Greece in its financing transactions with EFSF which involve debt facilities in excess of €150 billion as well as other transactions, such as the €35 billion securities purchase transaction between Greece and the ECB.
Our firm has been a pioneer in sovereign debt transactions for more than thirty years. The success of PSI was significantly enhanced by the use of collective action clauses, which have been promoted by Cleary Gottlieb since the 1990s, and specifically in the context of Greece in a 2010 paper co-authored by Mitu Gulati and Cleary Gottlieb partner Lee C. Buchheit. Another innovation in the PSI transaction is the use of a "co-financing agreement" used to link the new bonds issued by Greece to a portion of the loans made to Greece by the EFSF.
This engagement is the latest in a long line of high-profile sovereign debt assignments for our firm, which has represented clients in more than 30 countries around the world. In addition to Greece, the now largest-ever sovereign debt transaction, we are currently advising Iraq and Argentina – the second- and third-largest sovereign transactions, respectively – as well as Iceland in its debt matters.
PRACTICES: Sovereign and Bankruptcy and Restructuring
OFFICES: Buenos Aires, Cologne, Frankfurt, London, Milan, New York, Paris, and Rome
Working to Resolve the Eurozone Crisis We are advising the
EU Sovereign Debt Markets Sub-Committee of the European Union in the drafting and implementation of a model collective action clause to be included in all euro area government securities beginning in 2013.
We are also advising a variety of financial and industrial clients in the assessment of the potential consequences of the unlikely event that one or more members of the European Monetary Union were to cease using the euro as their lawful currency.
PRACTICES:
Sovereign and
Banking and Financial Institutions OFFICES:
Brussels and
London Corporate Law Reform in Africa In recognition of our extensive experience in Africa, we have been engaged by the
Organisation pour l'Harmonisation en Afrique du Droit des Affaires (OHADA) Permanent Secretariat and the
World Bank to lead a group of experts in charge of the reform and modernization of OHADA corporate law. OHADA is a treaty-based international system providing a uniform regime for business laws by way of Uniform Acts automatically applicable in the 17 West and Central African Member States.
We are working with local and international experts to enhance the attractiveness of OHADA corporate law and foster local and foreign investments in the OHADA zone while maintaining a realistic balance between international standards and the local business environment and practices in the OHADA zone. Our proposals are to be discussed by the National Committees of the Member States before being presented to the Council of Ministers of the OHADA Member States for final approval and ratification.
PRACTICES:
Sovereign,
M&A, and
Capital Markets OFFICE:
Paris
Successful Defense of Argentina in Sovereign Debt Litigation
In July 2011, we won a significant victory for the Republic of Argentina in the Second Circuit Court of Appeals on an issue of first impression concerning the immunities afforded by the U.S. Foreign Sovereign Immunities Act to central bank reserves. The Court of Appeals vacated orders the District Court had issued in 2006 freezing approximately $105 million of reserves of the Central Bank of Argentina. Since the spring of 2002, we have represented the Republic in litigation worldwide, including in the United States, Germany, Italy, and France, arising out of the Republic’s 2001 default on approximately $80 billion in external indebtedness.
PRACTICES: Litigation and Sovereign
OFFICES: Brussels, Frankfurt, London, New York, Paris, and Rome
Successful Defense of Iraq’s Sovereign Immunity
We successfully defended the Republic of Iraq’s sovereign immunity in the English Court of Appeal in relation to a $35 million claim by a Saddam-era creditor.
PRACTICES: Litigation and Sovereign
OFFICES: London and New York
International Treaty Arbitrations
We are counsel to DP World in an ICSID arbitration against the Republic of Peru arising out of an investment to build and operate a container terminal at the Port of Callao. Claims are asserted under the United Kingdom-Peru bilateral investment treaty, as well as under a concession agreement.
PRACTICES: Arbitration, Public International Law, Project Finance, and Sovereign
OFFICES: New York and Paris
Our litigators are advising OJSC Tatneft in an UNCITRAL arbitration against Ukraine under the Ukraine-Russia bilateral investment treaty claiming $2.43 billion for harm caused to its investment in an oil refinery located in Ukraine. Tatneft’s claims arose out of a forcible takeover by raiders of the Kremenchug refinery in October 2007. Our litigators prevailed on jurisdictional issues, and the case will now proceed to the merits phase, with a hearing scheduled for 2012.
PRACTICES: Arbitration, Public International Law, and Sovereign
OFFICES: Brussels, Moscow, Paris, and Rome
Kazakh People’s IPO Program
Our lawyers were counsel to advisors of the Kazakhstan Sovereign Wealth Fund in crafting rules for Kazakhstani pension plans to participate in the Peoples’ IPO program, which will allow Kazakh citizens to own shares in national corporations and help to further develop Kazakhstan’s domestic capital markets.
PRACTICES: Executive Compensation and ERISA and Sovereign
OFFICE: New York
Key Capital Markets Issuances
We were active in several key securities offerings and liability management transactions for sovereign clients, including as counsel to:
- República Oriental del Uruguay in a series of liability management transactions to further improve its external debt profile, totaling approximately $2 billion.
- The United Mexican States in the $1 billion reopening of its 100-year notes offering, the first century bond offering by a Latin American sovereign.
- The Republic of Chile in its SEC-registered $1 billion notes offering and Ps. 162.05 billion Chilean peso-denominated notes.
- The Korea Development Bank in its $1 billion SEC-registered notes offering.
- The Ministry of Finance of the Russian Federation in the RUB 50 billion re-opening of its debut ruble-denominated Eurobond issued in March 2011.
- The Export-Import Bank of Korea (KEXIM) in its $1 billion SEC-registered notes offering.
- The underwriters in a $1.5 billion bond offering by the Republic of the Philippines, one of Asia’s most frequent sovereign borrowers.
- The Province of Buenos Aires in its $750 million Reg S/Rule 144A notes offering.
Practices: Capital Markets, Sovereign, and Tax
Offices: Buenos Aires, Hong Kong, London, Moscow, New York, and São Paulo