Summary of Government Interventions in Financial Markets Belgium

Transcription

1 8 Septeber 2009 Suary of Governent Interventions in Financial Markets Belgiu Overview In addition to the steps undertaken by the ECB, the Belgian, Fleish, Walloon and Brussels governents have provided different types of support to the Belgian For this purpose, KBC issued on 19 Deceber 2008 of this transaction to increase core tier 1 capital in the governent investents; governent guarantees; governent loans; and Investents/recapitalisation Fortis On 29 Septeber 2008, the Belgian, Luxebourg and share in the coon equity of this entity; the Dutch governent invested EUR 4bn in Fortis Fleish regional governent for a non-dilutive, core capital injection of EUR 2bn (subject to approval of the Finance and Insurance Coission (the CBFA capital support enabled KBC to aintain its tier 1 ratio and conditions are siilar to those of the core capital issue (non-dilutive) core capital facility to the tune of EUR KBC Bank NV/SA

2 Dexia fro the governents of Belgiu, France and value; (b) losses incurred in a second layer of EUR 2bn above authorities and Belgian shareholders invested an the option to opt out of the equity guarantee; and by the Belgian state in cash to the level of 90 per Ethias Dexia On 9 October 2008, the Belgian, Luxebourg and French governents undertook to guarantee up to Belgian, Walloon and Fleish governents announced State guarantees KBC Bank NV/SA On 14 May 2009, KBC and the Belgian governent reached agreeent about an asset relief facility relating to a notional aount of EUR 20bn, including EUR 19 Noveber 2008, the Belgian, French and Luxebourg governents and Dexia signed a foral Belgian governent agreed to guarantee obligations up jointly undertaken to set up a guarantee echanis against payent of a preiu, KBC has bought a as bonds and other debt securities issued to the sae counterparties, provided that these liabilities, bonds or 2 Suary of Governent Interventions in Financial Markets Belgiu

3 nature of the obligations guaranteed, the guarantee fee On 1 July 2009, Dexia announced the closing of the sale years spreads calculated on the period beginning on 1 that these spreads are representative), or the edian of Fortis long-ter credit rating equivalent to that of Dexia, suppleented on operational and procedural aspects by conditional upon the bank continuing to ake credits Notably, this operational eorandu provides for (i) a onitoring process of the guaranteed aounts on a BNB National Bank (the BNB ) a state guarantee for every credit granted by it (as part of its contribution to guaranteed aount (as published on a daily basis) and Geeentelijke Holding NV the operational eorandu) can be found on requested the Belgian regional governents to provide Financial Security Assurance, Inc. In Noveber 2008, the Belgian and French governents agreed to provide a guarantee of the Fleish governent agreed to guarantee EUR 200, the Walloon governent agreed to guarantee EUR governents agreed in principle to double the guarantee fro the Belgian and French governents the federal governent also extended its EUR 400 ayer brown 3

4 Press reports also suggest that Geeentelijke Holding NV intends to issue EUR 484 of additional shares, Notable developents with coercial NMBS Holding KBC Bank NV/SA grant state guarantees to NMBS Holding (the holding Dexia principal outstanding under the relevant sale and lease back agreeent and for each guarantee, a inaugural governent guaranteed (see above) public Governent loans Other guaranteed bond issues by Dexia can be found on Fortis In addition to the initial investent by the Belgian, Dutch and Luxebourg governents (see above), a order for the Luxebourg governent to take over or restructure the Luxebourg Kaupthing operations relation to the restructuring of the Belgian banking and the loan is to guarantee the pay-out of the savings of 2009 and gave the authority to the Minster of Finance of Fortis Bank to BNP Paribas; and Fortis Bank transferring a portfolio of structured separately anaged entity ( SPV Under the ters of the restructuring, BNP Paribas transferred to a special purpose vehicle (SPV) called proposed restructuring and on 12 Deceber 2008 the shareholders should have been consulted on 4 Suary of Governent Interventions in Financial Markets Belgiu

5 be in replaceent of redeptions that occurred (even though the Belgian governent had acquired on a result, the purchase price to be paid by the SPV Belgian governent and BNP Paribas renegotiated in January 2009 soe of the ters of the restructuring Under the revised ters of the restructuring (as agreed governent); and provided in the for of debt, divided into 2 prograe) and (ii) a super-senior tranche of pursuant to coercial paper prograe Belgiu (or, subject to utual agreeent, post any Agreeent October 2008 agreeent can be suarised as March 2009 Insurance Belgiu to Fortis Bank for a total not be entitled to sell its statek in Fortis Insurance the up to a axiu of EUR 2bn in the for of non-innovative hybrid instruents or in the additional credit lines fro the structured credits ayer brown 5

6 option on the BNP Paribas shares held by the Belgian state but, under the revised agreeent, Fortis has been granted certain anti-dilution rights suppleents to, or deviations fro, the Belgian a syste of state guarantees for credit institutions, and other legal action against the break-up of Fortis pending in Belgiu and the Netherlands ay the governent, retroactive effect as of 9 October ipleented the state guarantee syste and each of 2009), the Belgian governent approved the cash in approved by the European Coission on 12 May the state guarantee only applies to obligations f counterparties, provided that these obligations Landbouwkrediet/Keytrade Bank the state guarantee only applies to obligations Suary of proposed key legislation/ regulation credit institution has taken (or has agreed to take) situation, solvency and liquidity and (ii) state establishent of a state guarantee for credits and other Law guarantee schee aied at preventing liquidity being cash out case of severe threats of a systeic crisis (and in order to liit the extent or the consequences of any such the state guarantee can only be granted to credit obligations that (i) are aied at covering losses (or subsidiaries and (ii) can contribute to avoid the risk 6 Suary of Governent Interventions in Financial Markets Belgiu

7 relevant institution has taken (or has agreed to situation, solvency and liquidity and (ii) state Other developents Depositor protection schee Pursuant to the Royal Decree dated 14 Noveber 2008, increased to EUR 100,000 for savings held at Belgian rights of terination and deands under either coverage for certain types of insurance products (as Short selling suppleents to, or deviations fro, the Belgian extended by a Decree of the Minister of Finance until a syste of state guarantees for credit institutions, insurance undertakings and other supervised p either liabilities entered into by those institutions or liabilities held by those institutions; a syste of state guarantees for non-institutional investors in recognised co-operative copanies (as circular stress test observation rations for the liquidity a syste of asset protection cover for credit institutions, insurance undertakings and other deterined by Royal Decree); a syste of state guarantees for liabilities For further inforation, please see Arco p anageent of assets fro credit institutions, insurance undertakings and other supervised Decree); and January 2009 that non-institutional shareholders in a state guarantee for liabilities entered into by the Geeentelijke Holding ayer brown 7

8 Guarantee schee for non-institutional investors in recognised co-operative copanies On 21 January 2009, the Belgian governent issued a guarantee schee for non-institutional investors in Belgacap On 29 May 2009, the Council of Ministers approved a supplier insurance ( Belgacap ) for a axiu payent of a guarantee preiu by the co-operatives; credit insurers grant to suppliers to cover their coitent of institutional investors to aintain its shareholding in the co-operative copany throughout the duration of the guarantee schee; liitation on the annual reuneration to individual and institutional partners; and liited transfer of dividends received by the co-operative copany fro the credit institutions cover has been reduced or is being reduced by their Fleish support for Ford Genk Due to the crisis in the car industry, the Fleish governent has agreed to provide an additional EUR General plan to revive the Belgian econoy Fleish support for Volvo Gent On 11 Deceber 2008, the Belgian governent set out the general principles of its general revival plan for the guarantees to Volvo Cars for an aount of up to EUR plan also sets out a nuber of additional easures to potential guarantees for Volvo Cars are currently taking 8 Suary of Governent Interventions in Financial Markets Belgiu

9 Contact us For further inforation, please contact Bruce Blooingdale Partner Kevin Hawken Partner Ed Parker Partner Michèle Daeleans ayer brown 9

10 About Mayer Brown Mayer Brown is a leading global law r with o ces in ajor cities across the Aericas, Asia and Europe. We have approxiately 1,000 lawyers in the Aericas, 300 in Asia and 500 in Europe. Our presence in the world s leading arkets enables us to er clients access to local arket knowledge cobined with global reach. We are noted for our coitent to client service and our ability to assist clients with their ost coplex and deanding legal and business challenges worldwide. We serve any of the world s largest copanies, including a signi cant proportion of the Fortune 100, FTSE 100, DAX and Hang Seng Index copanies and ore than half of the world s largest investent banks. We provide legal services in areas such as Supree Court and appellate; litigation; corporate and securities; nance; real estate; tax; intellectual property; governent and global trade; restructuring, bankruptcy and insolvency; and environental. OFFICE LOCATIONS AMERICAS Charlotte Chicago Houston Los Angeles New York Palo Alto São Paulo Washington ASIA Bangkok Beijing Guangzhou Hanoi Ho Chi Minh City Hong Kong Shanghai EUROPE Berlin Brussels Cologne Frankfurt London Paris ALLIANCE LAW FIRMS Mexico, Jáuregui, Navarrete y Nader Spain, Raón & Cajal Italy and Eastern Europe, Tonucci & Partners Please visit for coprehensive contact inforation for all Mayer Brown o ces. This Mayer Brown publication provides inforation (soe of which is obtained fro third party sources) and coents on legal issues and developents of interest to our clients and friends. It is not a coprehensive treatent of the subject atter covered and is not intended to provide legal advice or to be relied upon. Readers should seek spec c legal advice before taking any action with respect to the atters discussed herein Mayer Brown LLP, Mayer Brown International LLP, and/or JSM. All rights reserved. Mayer Brown is a global legal services organisation coprising legal practices that are separate entities ( Mayer Brown Practices ). The Mayer Brown Practices are: Mayer Brown LLP, a liited liability partnership established in the United States; Mayer Brown International LLP, a liited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia. Septeber 2009