Vienna, 8 April 2015. Fellner Wratzfeld & Partners (fwp) successfully provided legal advice to HYPO NOE, the association of mortgage banks of the Austrian Provinces and Pfandbriefbank in connection with financing repayments to be made for specific bond issues, thus ensuring the stability of both Pfandbriefbank and the mortgage banks guaranteeing such repayments.

fwp provided legal advice to HYPO NOE Gruppe Bank AG and consequently also to the association of the mortgage banks of the Austrian Provinces (Verband der Landes-Hypothekenbanken) and to Pfandbriefbank (Österreich) AG on how to ensure the timely payment of principal and interest to bondholders of Pfandbriefbank despite recent measures taken by the Austrian Financial Market Authority (FMA).

FMA, as the authority managing the winding down of HETA ASSET RESOLUTION AG (formerly HYPO ALPE-ADRIA-BANK INTERNATIONAL AG), imposed a debt moratorium on 1 March 2015. Since then and until 31 May 2016, any debts that HETA has vis-à-vis creditors, with only certain exceptions, must no longer be repaid. This also includes payment obligations in the amount of some EUR 1.25 billion vis-à-vis Pfandbriefbank attributable to bond issues made for HETA.

All mortgage banks of the Austrian Provinces and all Austrian Provinces (excluding Vienna) are subject to unrestricted liability for the amounts payable by Pfandbriefbank. In order to ensure the stability of the mortgage bank sector despite the temporary default of one of its members, the member institutions had to reach agreements on fund raising and payment handling within a very short time.

“We are happy that our concept helped to stabilise Pfandbriefbank and was swiftly structured and implemented after FMA had ordered new measures. In this case, once again, fwp proved its profound expertise in structuring complex financing transactions as well as winding down major clients with a large number of stakeholders involved”, says fwp partner Markus Fellner.