Greece Wins Legal Battle Over GDP-Linked Securities Buyback Amid Creditor Pushback
Greece's Court Victory and Implications for GDP-Linked Securities
Background of the Legal Dispute
LONDON, May 6 (Reuters) - Greece on Wednesday won a London court ruling on its plans to buy back GDP-linked securities issued to holders of government bonds as part of the country's 2012 sovereign debt restructuring.
Greece had told its investors that it wanted to repurchase all of the outstanding warrants due in 2042 for a call price of just over 25 cents on the euro.
Legal Proceedings in London
The country applied to London's High Court for declarations that it had validly exercised its option to purchase all of the GDP-linked securities and that its calculation of the call price was lawful and binding.
A group of investors, represented by law firm White & Case, disputed that Greece had validly exercised its option to buy back the securities or calculate the call price.
Court Ruling and Reactions
But Judge Robert Bright ruled in Greece's favour, a decision which could be challenged on appeal.
Greece's finance ministry and White & Case did not immediately respond to a request for comment.
Understanding GDP-Linked Securities
GDP-linked warrants are fixed income instruments that usually pay out once economic growth exceeds a certain threshold. They can be highly illiquid and complex to value.
Global Context and Comparisons
Argentina and Ukraine have issued similar instruments to the Greek GDP warrant in debt restructurings.
(Reporting by Sam Tobin; additional reporting by Karin Strohecker and Lefteris Papadimas in Athens; Editing by Louise Heavens)
