24 August 2021

McCann FitzGerald Advises DEPFA ACS Bank on Solvent Scheme of Arrangement

In a first for the Irish market, McCann FitzGerald advised DEPFA ACS Bank (“DEPFA”) on the successful use of a solvent Irish scheme of arrangement to effect and implement a full redemption of Irish covered bonds (asset covered securities) prior to their stated maturity dates. 

Prior to the scheme, nine separate series of Irish covered bonds originally issued by DEPFA in the mid-2000s were outstanding with a combined original issuance value of approximately €1.7 billion. The bonds had varying scheduled maturity dates running from 2022 up to 2037.  Consistent with market practice at the time of issuance, the terms and conditions of the bonds did not contain any issuer call option, nor did they contain any provisions allowing for the variation of the terms and conditions by majority bondholder vote. Previous attempts to repurchase all the bonds had proved unsuccessful.

The scheme and the early redemption of the bonds was sanctioned by Mr Justice Barniville in the Irish High Court on 29 July 2021. The scheme will facilitate the wind-down strategy of DEPFA and the DEPFA Group sooner than would otherwise be possible and will result in significant cost savings for DEPFA and the Depfa Group.

The McCann FitzGerald team was led by Fergus Gillen, David Byers, Seán Barton and David O’Dea.  

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