Minister of Finance greenlights offer to HETA creditors

Kärntner Ausgleichszahlungs-Fonds (KAF) will launch a public offer to HETA creditors next Tuesday (6 September 2016) pursuant to § 2a of the Austrian Financial Market Stability Act. The offer will implement the Memorandum of Understanding (MoU) concluded in May 2016 between the Austrian Minister of Finance and a significant number of creditors of debt instruments issued by HETA ASSET RESOLUTION AG (HETA) that are subject to a regional law deficiency guarantee.

The European Commission has cleared the offer under state aid law yesterday. Prior to launch of the offer a substantial number of HETA creditors have informed the Republic of Austria that they are willing to participate in the offer. This will also result in termination of the so-called lock up agreements between HETA creditors in order to enable all HETA creditors to accept the offer.

The Republic of Austria therefore expects that the offer will be accepted by the statutorily required majorities.

The key commercial terms of the offer were announced in May 2016 with the publication of the MoU and remain unchanged. The Province of Carinthia will contribute an amount of EUR 1.2 billion. The remaining funds will be provided to KAF by the Republic, thereby pre-financing to a large extent the recovery from the HETA resolution.