ATHENS – [ANA-MPA]
Greece has won a significant victory in the UK High Court, in connection with its decision to exercise the right to buy back Greek bonds linked to the country’s GDP, the Public Debt Management Agency announced on May 6.
Judge Robert Bright ruled in favor of Greece, concluding that the government had validly exercised its buyback rights and that the calculation of the repurchase price was correct, the announcement said.
Following a two-day hearing on April 21 and 22, the Court issued a judgment confirming that Greece validly exercised its purchase right under Clause 6.1 of the terms and conditions of the GDP-linked securities. The Court further stated that the buyback price of 252.28 euros per 1,000 securities was correctly calculated and determined by reference to the bid and ask prices provided by the Electronic Secondary Securities Market of the Bank of Greece during the relevant 30 trading days, as required by the terms and conditions of the securities.
The case concerned GDP-linked securities issued by Greece in 2012 as part of the restructuring of its public debt, with a total nominal value exceeding 62 billion euros, making them the largest series of GDP-linked securities ever issued by a sovereign state. The dispute arose after certain investors challenged the legality of the buyback notice issued by the Greek state and the methodology used to determine the repurchase price. Greece sought a declaratory judgment from the English courts in order to definitively resolve these issues.
In a detailed ruling, the Court rejected arguments that pricing should have been derived from alternative market sources and confirmed that Greece had correctly applied the contractual framework in determining the price.
“We welcome the decision of the High Court of England and the clarity it provides to bondholders and the broader market. The ruling confirms Greece’s commitment to acting in good faith and in accordance with the applicable contractual framework,” said Dimitris Tsakonas, Director General of the PDMA.
