IFR 03.21.2020

International Financing Review March 21 2020 15

People

&Markets

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Law firm KING &

SPALDING has hired

Craig Garvey as senior

partner in its

corporate, finance and

investments practice

group in Chicago.

Garvey is returning to

legal practice after

being a senior director

at retail and wholesale

pharmacy Walgreens

Boots Alliance, where

he led securities and

corporate governance.

He was previously a

partner at Kirkland &

Ellis. Garvey’s capital

markets practice will

focus on complex

securities matters,

including initial public

offerings, secondary

offerings and high-

yield debt offerings.

AUSTRALIA AND

NEW ZEALAND

BANKING GROUP has

named its New

Zealand capital

markets head as head

of sustainable finance

in the country. Dean

Spicer will continue as

capital markets head

until a successor is

announced. Based in

Wellington, he reports

to Stuart McKinnon,

acting managing

director for ANZ’s

institutional banking

division in New

Zealand. Spicer has

been with ANZ for

more than 13 years,

including a brief stint

in Vietnam.

EU rejects Banco Popular investors’

compensation claims

The claims for compensation lodged by

former investors in BANCO POPULAR that were

wiped out when the bank was resolved

overnight in June 2017 have been rejected

for a second time by the European Union’s

Single Resolution Board.

The resolution saw fellow Spanish lender

SANTANDER pick up the bank for €1 after

Popular’s junior bonds were converted into

equity.

The SRB, which with the European

Central Bank was responsible for that

decision, said no compensation was due to

the former shareholders and creditors, as

they would have been worse off if the bank

had simply been wound down under a

lengthy insolvency process.

“CLOSES THE PROCESS”

The latest ruling follows a review process

under which claimants were allowed to

submit comments. An independent valuer

also submitted a post-resolution valuation of

the bank. The SRB made its preliminary

decision in August 2018.

“This decision now closes the process of

analysing whether insolvency would have

meant a better outcome for affected

shareholders and creditors,” said Elke

Koenig, chair of the SRB. “It is clear that this

is not the case.”

The review process saw 2,

submissions, said the SRB. Several said they

did not feel the independent valuer was

SUFlCIENTLYûINDEPENDENTûSINCEûITûWASûTHEû

SAMEûlRMû$ELOITTEûTHATûDIDûTHEûPRE

resolution valuation. The creditors, led by

Algebris and Anchorage Capital, claimed in

one submission that they should be owed

€3.4bn.

“IRREGULARITIES”

A group of Mexican investors, including

Antonio del Valle, who was Popular’s largest

shareholder before its resolution, expressed

disappointment with the outcome. They

said Popular was solvent until a bank-run

days before it was resolved, which they say

was engendered by the authorities.

“This case is not about the false choice of

whether investors would have been better

off in an insolvency proceeding as compared

to the resolution of Banco Popular. It is

about the irregularities in both Spain and

THEû%5ûTHATûLEDûTOûTHEûUNJUSTIlEDûRESOLUTIONû

of a solvent bank,” the group said in a

statement.

They claim a report from central bank

"ANCOûDEû%SPANAûCONlRMEDû0OPULARûWASû

solvent until a late stage.

An investigation is currently being

conducted by the Spanish authorities into

the resolution of Popular. This was due to

see ECB deputy governor Luis de Guindos,

who was Spain’s economy minister at the

time, give public evidence to a Madrid court

next month, as well as Santander chair Ana

Botin in May.

That timetable is now under review given

the coronavirus outbreak.

The creditors have launched various legal

actions against the authorities, including at

the EU’s general court.

Christopher Spink

that make it hard to do the proper research

on non-household names.

“Investors might be struggling with

connectivity issues from home, they might

be struggling with their dog barking in

the background and kids coming into the

OFlCEûBUTûTHOSEûISSUERSûTHATûPEOPLEûHAVEûAû

comfort with, that are higher quality, this is

the right time for them to issue,” one

investor said.

Remote work also has the knock-on effect

of traders showing less tolerance for risk.

And portfolio managers are trying to get a

handle on the risk in their portfolios making

illiquidity in the market all the harder.

“When traders are not on the desk, and

are isolated from peers, they are probably

going to be less apt to add risk in this

environment,” one high-yield portfolio

manager said.

“That is going to contribute to lower

dollar prices and wider spreads.”

ASIA TOO

Asia, which has had longer experience of

the coronavirus, is also still adapting. From

Mumbai to Manila and Sydney to Singapore,

Asia’s banks have kicked their business

recovery plans into full gear, with some

asking all but the most essential staff to

work from home.

Whereas previously banks had only

implemented business continuity plans in

those markets most affected by the initial

outbreak – such as China, Hong Kong, Japan

ANDû3OUTHû+OREAûnûFORûMOSTûBANKSûALLûOFlCESû

in the region are now affected.

h4HEûTRADINGûmOORûLIGHTSûAREûSTILLûONûBUTû

across many other business functions

NOBODYûISûINûTHEûMAINûOFlCEûANYMOREû4HEû

investment banking team has been working

from home for several weeks now,” said one

Hong Kong-based trader.

William Hoffman

Additional reporting by Thomas Blott in Hong Kong

“This case is about the

irregularities in both Spain and

the EU that led to the unjustified

resolution of a solvent bank”

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