Monday, 5 March 2012
A better tarnslation of Bondholders Act 4050
Unofficial translation of Bondholders Act
4050/12.
This translation is an improvement of the quick and dirty translation
done by Andreas Koutras and it was done by
Vassilis Sourlas
Please do not rely on this
translation for any decision as it is not official and may contain many errors,
mistakes and misunderstandings. It is done only for information
purposes.
THE PRESIDENT OF THE HELLENIC
REPUBLIC
We issue the following law
that has been approved by the Greek Parliament
Article
1
1. For the purposes (application)
of this article the concept of the following terms is as follows:
a) As ‘title (instrument)’ is considered a bond, debenture or other
title (instrument) of debt, in physical or dematerialized form (registered or book entry form), governed
by Greek law and whose: aa) issuer or guarantor
is the Greek State, bb)
original duration (maturity) at the time of the first issuance exceeds twelve months and cc) the issuing date precedes the
31st December 2011.
b) As ‘eligible title (security)’ is
considered any title (security) specified by decision of the council of
ministers (Cabinet) and by invitation
of the Greek State, as
defined in paragraph 2.
c) As ‘outstanding capital’ is considered the capital (amount) of the eligible title
(security) which has not been paid (redeemed)
according to the terms of the eligible title (security) on the date
specified by the invitation, and
as ‘aggregate outstanding capital’ is considered the sum of all outstanding capitals
(amounts) of all eligible titles (securities)
which are defined in the relevant decision by the council of
ministers (Cabinet) and the corresponding invitation of the Greek State, as provided in paragraph 2, with no regard to
the series, duration (maturity), interest rate (coupon) or
other individual characteristics
of the eligible titles (securities).
d) As ‘amendment’ of
titles (securities) is considered the change or addition of terms to one or more of the eligible titles (securities)
or the exchange of one or more of the eligible titles
(securities) with one or more new titles
(securities).
e) As ‘new title (security)’ is
considered a bond, debenture, other title (security) of lending
(instrument of debt) or guarantee, or financial instrument, in a physical or dematerialized form (registered or book entry form), or an equivalent of the above for the purpose of applying foreign provisions, that is exchanged for one or more eligible titles(securities) that are amended.
If the new title (security) is a financial instrument it is accepted to
have its performance (return)
linked to the GDP.
f) As ‘Bondholder’ is
considered the participant who is registered under the
System for Monitoring Transactions in
Book-entry Securities (the "System") of paragraph 1
of Article 6 of Law 2198/1994 (A 43), to the accounts of
which, in the system, the
eligible titles (securities) are
registered, as it is specified in paragraph 2 of the invitation.
For the titles (securities) that are not monitored by the system, the ‘Bondholder’ is
considered as: aa) for the
debenture of bearer bonds
according to paragraph 5 of
Article 1 of Law 3156/2003, the bearer of
the title(security) on the
date specified in the invitation bb) for the debenture with nominal
(registered) bonds in paragraph 5
of Article 1 of Law 3156/2003, the beneficiary stated in the title (security) and cc) for a
debenture of intangible (book entry form) bonds, the person who he has been rated a (nominal) certificate in
accordance to paragraph 6 of
Article 1 of Law 3156/2003, on the date specified by the invitation.
g) As the
‘Process
Manager’ is considered the Bank of Greece.
h) As ‘investor’ is
considered: aa) for titles
(securities) monitored by the System, the investor who has a claim on or
under the title (security) according to the provisions of
paragraphs 2 and 4 of
Article 6 and Articles
7 and 8 of
Law 2198/1994 and bb) for titles (securities) that are not
monitored from the System, the
bondholder.
i) As ‘participation’ in the decision-making process of paragraph 4 shall be
meant exclusively, the positive
or negative vote of the
Bondholder in this process,
(participating) with a specific amount of outstanding capital of the eligible titles
(securities) he possesses. The
invitation of paragraph 2
determines the specific conditions and means of the
participation, which may be done
by representation as well (the
participation).
2. The
Council of Ministers (Cabinet), following the suggestion of the Minister of Finance,
decides to launch the procedure for amending the eligible titles (securities)
held by the Bondholders, determines the eligible titles (securities) and upon
exchange defines the capital (principal) or
nominal amount, the interest rate (coupon) or the yield to maturity, the duration (maturity),
the English or other law which will govern the new titles (securities) to be
issued by the Greek State and authorizes the PDMA (Public Debt Management Agency)
to issue one or
more invitations from the Greek State.
The invitation calls the Bondholders of the eligible titles
(securities) specified in it
to decide, within a certain
timeframe, if they accept
the amendment of the eligible
titles (securities), as proposed by the Greek State and in accordance
to the (described) procedure of
this article.
In the invitation are defined inter alia: a) the eligible titles
(securities), b) the terms which are proposed to be amended, c) the
new content of the terms, d) any
new terms, e) upon exchange of the eligible titles
(securities), the terms of the new titles
(securities), as defined by decision of the Council of Ministers (Cabinet) and their additional conditions, such as the subdivisions of the title (security), the grace
period, the currency (denomination), the terms and means
of payment, repayment and repurchase (buyback),
the reasons for termination (events of default), the
negative obligations of the issuer
(negative pledges), the
appointment rights and obligations of the Bondholders trustee, the collective
action clauses of the new
titles, etc. f) the period within
which the bondholders of the
eligible titles (securities) are
required to decide, g) the particular terms
and
how
to participate in
the decision-making process.
3. The
invitation shall be served to the Process Manager and published on the Internet
as specified herein. The deadline for a decision cannot be less than ten (10)
days from the date of the publication of the invitation.
4. The
Bondholder’s participation in the process is conducted by all or part of the
outstanding capital (principal) of the eligible titles (securities) he
possesses, as is defined by the invitation. For the amendment of the eligible
titles (securities) is required the participation in the process (quorum) of at
least half of the total outstanding capital of all eligible titles (securities)
specified in the invitation ("participating capital") and a qualified majority
in favor of the amendment of at least two thirds (2/3) of the participating
capital.
5. The portion of the
outstanding capital of
the eligible titles (securities) of whom the investor is the Greek State or, for
eligible titles (securities) that are guaranteed by the Greek State, the portion of the outstanding capital of the
eligible titles (securities) the investor of which is the issuer or
the guarantor of the title (security), is not
considered when calculating the total outstanding capital, neither for the
calculation of the quorum nor the qualified majority which are stated
in paragraph 4.
6.
Eligible titles (securities) that are
issued (denominated) in a currency
other than euro, are converted into euros according to the exchange
rate set by the European
Central Bank on the date
specified in the invitation.
7. The participation of a
Bondholder in the decision-making
process of this Article is considered,
with regard to the Process Manager, the Greek State, the PDMA, their assignees, to be performed
under the instructions and with the
consent of the investor. The above
mentioned shall not be liable to the investor, the Bondholder
and any third party if a Bondholder participated in the process without the consent of
the investor or in violation
of his instructions.
8. The decision of the Bondholders
is certified by an act of the
Process Manager, which is published in the same manner as the invitation and is approved by a
decision of the Council of Ministers (Cabinet), which is
published in the Government Gazette.
9. Since the approval
decision of the Council of Ministers (Cabinet) is
published in the Government Gazette, the decision of the Bondholders, as
witnessed by the Process
Manager applies erga omnes, binds
the bondholders and investors
of the eligible titles (securities) as a whole and prevails any potential contrary
legislation, of any kind, general
or specific provisions of law or
regulation issued by the administration or
agreement. In the case of
exchange of the eligible titles (securities),
the eligible titles (securities)
that are exchanged, cancel automatically with the
registration in the System of
the new titles (securities) and any
right or obligation derived
therefrom, including all rights
and obligations that at any
time formed part of them,
extinguish.
10. The issuance of the new titles
(securities) is conducted upon
the decision of the Minister of Finance which is
published in the Official Gazette. Any specific technical issue necessary to
implement the provisions of this Article may be adjusted by decision of the Minister of Finance which is published in the Government
Gazette.
11. The provisions of this
Article aim to protect the
supreme (overriding) public interest, are mandatory rules effective immediately, prevail any contrary legislation
of general or special provisions
or regulations issued by the administration or
agreements, including the provisions of law 3156/2003 (A’ 157) and their
application neither does generate or activate any
contractual or statutory right in favor of the bondholders or the investors, nor does it activate any contractual
or statutory obligation against
the issuer or guarantor of the titles (securities), except for those that are explicitly referred to in the provisions of this
Article.
Article 2
1. In Article 2 of Law 3156/2003 (A 157) paragraph 4
is added as follows:
“4.Terms of debentures, falling within the scope
of this law and guaranteed by the Greek State, which prohibit or restrict the assignment or the transfer of the title (security), should not
apply to the assignment or the transfer of a title (security) to the Greek
State, according to the application of the programme for the restructuring of the Greek debt.
2. In Article 12 of the Income Tax Code ratified by Law 2238/1994 (A 151), the new paragraph 15 is added which reads:
"15.
When as part of the participation program in the redeployment of Greek debt,
holders of bonds issued by the Greek State or holders of corporate bonds that
are guaranteed by the Greek State acquire new bonds of the European Financial
Stability Fund, for the amount of accrued and unpaid interest attributable to
the time of the initial bond exchange, the withholding tax due because of
discounting the interest (coupon) on the new bonds is conducted at the end time
(maturity) of the new bonds by the intermediary bank. The tax is
attributed within the first fifteen days (first half) of the following month
during which it was withheld with a statement submitted
to the competent tax office
and in the case that the beneficiary of
the interests (coupons) is the bank itself, the
bank is obliged to pay
the tax due within the same
period.
The provisions of
paragraph 6 of Article 3
of Law 4046/2012 (A 28) shall apply accordingly concerning the interest (coupon) of
this paragraph. "
Article
3
The validity of the present
law commences from the publication
in the Government Gazette, unless it is specified otherwise in the individual provisions.
http://andreaskoutras.blogspot.com/2012/03/better-tarnslation-of-bondholders-act.html
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