Apr 16, 2010

Cleary Gottlieb represented the Republic of Côte d’Ivoire in connection with its recent exchange offer that restructured over 99% of the country’s $2.8 billion Brady bond debt, which had been in default since 2000.

Côte d’Ivoire accepted tenders of six series of defaulted Brady bonds in the exchange offer, consisting of French franc- and U.S. dollar-denominated discount bonds due 2028, front-loaded interest reduction bonds due 2018 and past due interest bonds due 2018, and issued $2.3 billion principal amount of new U.S. dollar-denominated step-up bonds due 2032 in exchange. The offer closed on April 16.

The debt renegotiation and the exchange offer were conducted within the framework of the International Monetary Fund’s and the World Bank’s initiative for Heavily Indebted Poor Countries, and in accordance with the terms of a preliminary restructuring agreement reached with the Private Creditors Coordination Committee (London Club), a group of institutional bondholders, in September 2009.

The exchange offer, which included a 144A offering and an international offering, had several notable features. Due to the rebuilding of Côte d’Ivoire’s institutions in the wake of civil conflict and the resulting absence of reliable macroeconomic data, the offer did not involve the preparation of extensive country disclosure or the issuance of negative comfort letters by counsel. Due diligence for the transaction consisted principally of an investor meeting with representatives of the Republic held in Paris on March 23. The transaction also featured complex mechanics related to the liquidation of the principal and interest collateral. In addition, the exchange offer included exit consents to amend the existing bonds not tendered in the exchange, which were approved at bondholder meetings held at Cleary Gottlieb’s Paris office on April 6. Application will be made to list the new bonds on the Luxembourg stock exchange.

Sep 30, 2009

On September 30, Judge Richard J. Holwell of the United States District Court for the Southern District of New York granted Cleary Gottlieb’s motion to dismiss all claims against our clients the Republic of Iraq, the Central Bank of Iraq and Rafidain Bank as barred by the statute of limitations. The suit brought by Bulgartabac Holding AD, a Bulgarian company, sought damages of $30 million for alleged breach of contracts and dishonor of letters of credit issued in connection with sales of cigarettes from communist Bulgaria to Saddam-era Iraq during the 1980s. The district court rejected various claims of equitable tolling and other theories of extension of the statute of limitations asserted by the plaintiff, and held that the claims were time-barred under New York’s six-year statute of limitations, which applied by virtue of New York’s borrowing statute.

This is the second case in which Cleary Gottlieb has defended Iraq against suits brought by a Bulgarian company. The first, filed in the United States District Court for the District of Columbia by Agrocomplect, a Bulgarian company that provided engineering and land reclamation services, was dismissed in November 2007. That holding was affirmed by D.C. Circuit Court in November 2008. Cleary Gottlieb has also represented the new government of Iraq in a number of international arbitrations.

Oct 26, 2009

Cleary Gottlieb successfully represented the Republic of Congo in an International Chamber of Commerce arbitration against Groupe Antoine Tabet, a Lebanese company. In its October 26 award, the ICC Arbitral Tribunal dismissed Groupe Antoine Tabet's claim and granted Congo's counterclaim in the amount of €34 million.

This decision puts an end to a 10-year complex arbitration arising out of two agreements for the financing by Groupe Antoine Tabet of the construction and expansion by Groupe Antoine Tabet's congolese subsidiary (Afrique Entreprise Tabet) of roadways in Congo.

After the 1997/1998 civil war, the new Congolese Government terminated the agreements with Groupe Antoine Tabet.

Relying on (i) an allegedly agreed-upon fixed repayment schedule and (ii) the indemnification clause provided for in the agreements, Groupe Antoine Tabet sought more than €100 million as a result of Congo's failure to make installment payments under the fixed schedule and to compensate for the loss suffered by Afrique Entreprise Tabet during the civil war.

The Republic of Congo denied Groupe Antoine Tabet's claim and asserted a counterclaim seeking compensation for excess repayments under the financing agreements.

The ICC Tribunal upheld Congo's defense that the repayment schedule relied upon by Groupe Antoine Tabet was not binding on Congo, dismissed most of Groupe Antoine Tabet's damages claims, and granted Congo's counterclaim.

The overall outcome is an approximately €34 million debt from Groupe Antoine Tabet to the Republic of Congo.

This dispute also gave rise to numerous civil and criminal judicial proceedings in Congo, France, and Switzerland, including ongoing annulment, exequatur and enforcement proceedings in France, in which Cleary Gottlieb represents the Republic of Congo.

Oct 15, 2009

On October 15, Cleary Gottlieb won an important victory for the Republic of Argentina in the Second Circuit Court of Appeals. The Court of Appeals reversed orders of the district court freezing approximately $200 million of pension fund assets located in the United States. The lower court had issued the orders following the public announcement in October of last year that, in response to the global financial crisis, Argentine law was being amended to transfer the administration of the pension fund assets from private entities to the Argentine national security system, ANSES. The law required pension fund assets outside of Argentina to be repatriated to Argentina. The Second Circuit agreed with Cleary Gottlieb's arguments that the social security funds in the United States were not being “used for commercial activity” in the United States, and that therefore the funds are immune from attachment and execution under the U.S. Foreign Sovereign Immunities Act.

Jan 13, 2010

Cleary Gottlieb represented Barclays Capital, Deutsche Bank and The Hong Kong and Shanghai Banking Corporation as underwriters in a US-registered offering by the Republic of the Philippines of $650 million of its 6.50% global bonds due 2020 and $850 million of its 6.375% global bonds due 2034. The offering closed on January 13 and was the first international debt offering in East Asia in 2010. The bonds were listed on the Official List of the Luxembourg Stock Exchange and admitted for trading on the Euro MTF Market.

Cleary Gottlieb is the designated underwriters’ counsel for offerings by the Philippines, which is one of Asia's most frequent sovereign borrowers.

Sep 22, 2009

On September 22, 2009, the United States Court of Appeals for the Second Circuit affirmed the decision of Judge Pauley (S.D.N.Y.) denying Compagnie Noga D'Importation et D'Exportation S.A.'s ("Noga") motion to confirm an arbitration award against Cleary Gottlieb client, the Russian Federation. In denying the motion to confirm, the Second Circuit held that as a result of Noga's prior assignments of its claims against Russia, Noga "failed to establish that it retains an interest in the arbitral award" and, therefore, lacked standing to confirm the award. This decision puts an end to almost 10 years of litigation in the United States relating to whether Noga has standing to confirm and enforce the arbitration award.

Oct 17, 2007

Cleary Gottlieb represented The Export-Import Bank of Korea in its SEC-registered offering of US$1.5 billion 5.50% notes due 2012. The offering, a takedown from KEXIM’s shelf registration statement under Schedule B, closed on October 17.

The notes were listed on the Singapore Stock Exchange. ABN AMRO, BNP Paribas, Merrill Lynch and Morgan Stanley were the joint lead managers and bookrunners for the offerings.

KEXIM was established in 1976 as a special governmental financial institution pursuant to the Export-Import Bank of Korea Act to promote the sound development of the Korean economy and economic cooperation with foreign countries by extending the financial aid required for export and import transactions, overseas investment and the development of natural resources abroad.

Nov 21, 2008

Cleary Gottlieb is representing the German Savings Bank Association (“DSGV”) with respect to back guarantees granted by DSGV and other major German banking associations and financial institutions to the Federal Republic of Germany in connection with a €50 billion rescue package arranged by the German Federal Government and various significant financial institutions for the Hypo Real Estate Group.

In 2007, Cleary Gottlieb advised DSGV on the acquisition of Landesbank Berlin Holding AG (formerly “Bankgesellschaft Berlin”).

Aug 12, 2009

Cleary Gottlieb represented Petroliam Nasional Berhad (PETRONAS) in concurrent Rule 144A/Regulation S offerings of $3 billion in 5.25% senior notes due 2019, which were guaranteed by PETRONAS and issued by PETRONAS Capital Limited, a Labuan special purpose company and finance subsidiary of PETRONAS, and of $1.5 billion in sharia-compliant trust certificates (known as sukuk) due 2014 issued by PETRONAS Global Sukuk Ltd. (PGSL), a Labuan special purpose company. Both offerings priced on August 5 and closed on August 12.

The offerings represent the largest corporate debt issuance in Asia outside Japan in the last five years and the second-largest corporate debt issuance ever in Asia outside Japan. The sukuk offering is one of the two largest global sukuk transactions ever done, and the first global corporate sukuk transaction in 2009.

PETRONAS is a fully integrated oil and gas corporation with operations or investments in more than 30 countries around the world. It is wholly owned by the Malaysian government and is ranked among the FORTUNE Global 500.

Dec 02, 2009

Cleary Gottlieb represented the joint dealer managers / joint lead managers in the $1.2 billion combined liability management transaction and global bond offering by Power Sector Assets and Liabilities Management Corporation (“PSALM”). The transaction consisted of (1) an exchange offer in which three series of bonds of the National Power Corporation (“NPC”) were exchanged for an aggregate $600 million of PSALM’s 7.39% bonds due 2024 and 7.25% bonds due 2019, in each case guaranteed by the Republic of the Philippines, and (2) an offering for cash of $600 million of PSALM’s 7.39% guaranteed bonds due 2024. The invitation to exchange old NPC bonds for new PSALM bonds was made in the United States in a private offering under Section 4(2) of the Securities Act and outside of the United States in offshore transactions in reliance on Regulation S. The invitation was launched on November 16 and expired on November 24. The offering of bonds for cash was made in a Rule 144A/Regulation S offering and was priced on November 23. The combined transaction closed on December 2.

PSALM is wholly owned by the Republic of the Philippines, and was created to manage the privatization and restructuring of the Philippine electric power industry, including the debts of NPC.

Cleary Gottlieb also represented the underwriters in PSALM’s inaugural global bond offering in May.

Oct 07, 2008

Cleary Gottlieb represented Slovenia in proceedings brought by three Croatian individuals before the European Court of Human Rights. The dispute arose out of Yugoslavia’s collapse. It concerns the distribution among the successor States of Yugoslavia’s liability for foreign-currency deposits with commercial banks. On November 6, 2006, after it had declared the applications admissible in October 2003, the Court decided to strike the applications out of its list of cases. Upon the request of the applicants, supported by the Republic of Croatia, the case was referred to the Grand Chamber consisting of seventeen judges of the Court in May 2007.

The applicants deposited foreign-currency with Ljubljanska Banka Zagreb prior to Yugoslavia’s dissolution. Payment of the deposits was guaranteed by Yugoslavia. As a result of the collapse of the Yugoslav banking system, the Yugoslav banks could not pay their foreign-currency depositors. The applicants claimed that Slovenia as a successor State is liable for their deposits and Slovenia’s failure to reimburse them would violate their right to property. Slovenia accepted liability for deposits made on Slovenian territory, but not for deposits in other successor States.

The Grand Chamber confirmed the Chamber’s decision to strike the cases on the grounds that two of the applicants had received payment from assets located in Croatia. As regards to the third applicant, who received no payment, the Court held that in cases in which liability for a former State’s debt is disputed by the successor States, a debtor should seek redress where other debtors have been successful, in this case the Croatian courts.

The Grand Chamber also noted that several thousands of foreign-currency depositors, also located outside Slovenia, had lodged complaints against Slovenia and other successor States and confirmed the matter must be solved by agreement between the successor States. The Grand Chamber called on the successor States to proceed with the distribution of Yugoslavia’s guarantee for foreign-currency deposits as a matter of urgency with a view to reaching an early resolution of the problem.

Apr 19, 2009

Cleary Gottlieb represented the Republic of Liberia in its negotiations with private creditors to eliminate approximately $1.2 billion in outstanding private sector debt, at a discount of nearly 97 percent of its face value, the steepest discount ever negotiated on developing country commercial debt. The deal closed on April 14 after over two years of negotiations, with a payment of $38 million to extinguish 25 outstanding commercial facilities representing 97.5% of Liberia’s foreign commercial debt, one of the highest rates of participation in a sovereign debt buyback in the last several decades. The World Bank contributed half the money for the buyback through the International Development Association Debt Reduction Facility, and the United States, Germany, Norway and the United Kingdom contributed the other half. The buyback was completed at no cost to the citizens of Liberia thanks to the financial support of the World Bank and other partners, including a Swiss foundation.

Sep 26, 2008

Cleary Gottlieb represented Temasek in its multi-billion dollar investment in Merrill Lynch.

Temasek is an investment holding company owned by the Singapore government with staff of over 300 people and a portfolio of over $100 billion focused primarily in Asia.