Heta Creditor Group Says Ready to Restructure Carinthia Debt
By Boris Groendahl and Alexander Weber - 18 nov 2015, 12:59:22
Austrian bad bank Heta Asset Resolution AG’s biggest creditor group is ready to restructure state guarantees of as much as 11 billion euros ($11.7 billion) in bonds as long as the debt is repaid in full.
The “Ad Hoc” group of Heta bondholders, who own about 2.5 billion euros, said in a statement Wednesday that they consider the province of Carinthia solvent enough to honor its guarantees on Heta’s bonds. The deficiency guarantee Carinthia gave to the bank it owned until 2007 could lead to claims of around 3 billion euros, which could be paid down at affordable annual rates over 30 years if Austria backs them, the group said.
“The Ad Hoc group is prepared to restructure its guarantee deficiency claims in a debtor-friendly structure,” Leo Plank, a lawyer at Kirkland & Ellis International LLP’s Munich office, said by telephone. “What’s important for us is the net present value remains intact.”
Heta is managing the remnants of Hypo Alpe-Adria-Bank International AG, one of the most damaging Austrian bank failures after the 2008 financial crisis. Austria spent billions of euros to prop up Hypo Alpe after nationalizing the bank in 2009, angering voters and undermining the country’s credit ratings.
The creditors are headed for a face-off with Hans Joerg Schelling, who last year became the fourth Austrian finance minister to deal with Heta. Under Schelling’s plan, endorsed by Austria’s parliament on Oct. 15, the federal government would help Carinthia fund a discounted purchase of Heta’s bonds to defuse the guarantees.
Carinthian Spending Cuts
The offer will consist of two elements: The expected recovery rate from selling and winding down Heta’s assets, plus a contribution from Carinthia that’s commensurate with its “economic capacity.” The discount will be imposed on all debt holders if at least two-thirds accept the deal, a threshold the Ad Hoc group expects won’t be achieved.
Carinthia’s finance secretary, Gaby Schaunig, told the regional parliament Tuesday that the province of 560,000 can’t afford to pay the guarantees, most of which were extended in the years before 2007, when right-wing populist Joerg Haider governed the province. Excluding one-offs such as legal costs and a payment to the Austrian Pfandbriefbank, both in connection with Heta, Carinthia is cutting spending by more than nine million euros next year, to about 2.4 billion euros, Schaunig said.
In a model calculation by the Ad Hoc group, Carinthia would have to pay 53 million euros each year to service a 30-year bond used to pay back Heta creditors. "It should be possible to pay 53 million euros out of a budget of 2.4 billion, by increasing efficiency without impairing services to citizens," Plank said.
“I have a clear message to the creditors,” Schaunig said when presenting the province’s 2016 budget. “I tell you: We can’t and we won’t pay more. Carinthia’s contribution will be seriously calculated and it will amount to the maximum that’s economically feasible and legally possible.”
The Carinthian government and the Austrian finance ministry declined to comment on the latest creditor proposal.
Members of the Ad Hoc group include Commerzbank AG, FMS Wertmanagement AoeR and Pacific Investment Management Co., as well as distressed debt investors including Cyrus Capital Partners, LP, Farallon Capital Europe LLP and Knighthead Capital Management, LLC.
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: in quella classe di rating (BB+) e su quella scadenza hai qualche bond comparabile ? Talvolta guardo i bond CNP, ma hanno un rating più elevato.
ed oltre ad aggiungerne di nuove sto cercando di completare le informazioni mancanti di quelle vecchie.
