International Financing Review September 8 2018 17People
&Markets
Please contact us if you have information about job moves: [email protected]
STANDARD
CHARTERED has
hired Nick Burge from
Lloyds Banking Group
to work with European
clients on Brexit and
other regulatory and
liquidity issues. Burge
joined as head of client
solutions for regulatory
and liquidity strategy,
a newly created role.
He will be responsible“for leading the bank’s
Brexit client
communications
strategy”. Burge had
worked at Lloyds since
2005 and was most
recently head of
regulatory and risk for
global corporates. He
has previously worked
at FleetBoston and
Nomura.BARCLAYS has
bolstered its green
banking franchise with
the appointments of
Rhian-Mari Thomas as
global head of green
banking and Victoria
Land (left) as head of
debt capital markets
origination in social
responsibility
investments and Green
bonds. Thomas will beresponsible for
developing Barclays’
green strategy globally
within banking in the
newly created job.
Thomas joined Barclays
in 2000 and spent 10
years in leverage finance
and financial sponsors.
Land has joined from
HSBC, where she was
director of sustainable
bonds for EMEA.US should suspend redress for
Venezuela creditors
US President Donald Trump or his successor
should use an executive order to prevent
creditors of VENEZUELA from seizing oil or other
assets so that a consensual restructuring of the
country’s debts can be carried out after the
current regime of Nicolas Maduro ends.
The recommendation comes from Lee
Buchheit, partner at law firm Cleary Gottlieb,
who advised Iraq on restructuring its US$140bn
of debts after the downfall of Saddam Hussein.
In that situation a UN security council resolution
prevented creditors taking Iraqi oil as payment.
The situation in Venezuela has become
desperate over the last year. The bolivar has
collapsed and inflation is expected to rise to
1,000,000% by the end of the year, according
to the IMF.
In November Maduro told creditors he
wanted to restructure the country’s foreign
debt, which is estimated at US$120bn
including sums owed to suppliers and
bilateral lenders. Payments on numerous
bonds have been missed since then.
Buchheit said an executive order should
include a proposal to allow “all US creditors
to vote on a negotiated restructuring
proposal as a single creditor class” with a
supermajority binding the entire class to the
terms of a restructuring, and prevent hold-
outs from seeking a recovery in the US courts.
Buchheit, in a paper published with Duke
University law professor Mitu Gulati, said
the situation in Venezuela is similar to Iraq,
where there are creditors with divergent
motives, some of whom may prefer to hold
out from a wide agreement.
“There is nothing in the arsenal of
conventional sovereign debt restructuring
techniques that can confidently deliver
an efficient and comprehensive
treatment of the legacy debt stock inVenezuela,” Buchheit and Gulati said.
Even after Iraq lost protection from the
UN resolution in 2007, US executive orders
were renewed each year until 2014 to
prevent creditors from taking unilateral
action. This allowed Iraq, under Buchheit’s
direction, to reach a solution with creditors
holding 96% of claims by value.ECONOMY STRANGLED?
With Venezuela, as well as bondholders
with US$65bn of outstanding notes in the
sovereign and national oil company PDVSA,
there are bilateral creditors. China is owed
US$22bn, and others have arbitration claims
against the country.
Most of Venezuela’s foreign currency
earnings come from exporting oil, with the
majority of cash sales, rather than debt
payments-in-kind, being made to the US. This
potentially creates a highly volatile situation.
“If even a small group of unpaid creditors
were to find an effective legal strategy in the
US that resulted in seizures of Venezuelan
oil or the cash proceeds from the sale of that
oil, the economy of the entire country could
be strangled,” Buchheit and Gulati said.
They said providers of fresh cash, whether
from the official or commercial sector, to help
the country after a regime change would “not
be prepared to see their funds bleed out
immediately to pay existing claimants”.
The US should be prepared to act if a
proposal to freeze assets and revenues
streams at the UN security council was
blocked by permanent members, and
Venezuelan creditors, Russia or China.
If the US had to act unilaterally, however,
there could still be drawbacks as litigants
could seize Venezuelan assets outside the US.
Christopher SpinkBayer Rosmarin, and head of human
resources Melanie Laing would all leave.
Other senior personnel have quit, leaving
Comyn with a depleted executive
committee. In June, CBA made six new
appointments to its excom, including
internal promotions and external hires.
Standard Chartered has undergone a major
reorganisation since Bill Winters was installed
as CEO in mid-2015, although the bank has
recently sought to draw a line under its recent
travails by talking up growth.
Steve Slater, Thomas Blottauthorities are unlikely to step in and guarantee
bank debt in future crises as they did in 2008.
Between October 2008 and May 2010,
nearly 1,400 bond issues from about 200
banks, raising €1trn, were guaranteed by
national authorities, according to the G30.
Dodd-Frank has stopped the Federal Deposit
Insurance Corporation from offering
guarantees without Congressional approval.
The introduction of the principle that bonds
and other liabilities must first be bailed in before
a taxpayer bailout also played against this.
“The interplay between guarantee
programmes and lender-of-last-resort
activities and the new constraints on the
latter make guarantee restrictions that
much more problematic,” said the report.
It said that much progress had been made
through cooperation between various
jurisdictions to raise bank capital levels and
establish, via international regulatory
bodies, new rules on how to resolve
financial institutions in difficulty.
But it cautioned that proposals by the US
and European Union to locally ring-fence
some capital of big banks could weaken the
ability of such groups to operate efficiently.
That could make problems worse should they
fail.
Christopher Spink5 PM 2250 p15-24.indd 17 07/09/2018 18:36: