Bloomberg on Tuesday reported that the Greek government is seeking recourse to the UK justice system over a dispute regarding GDP-pegged warrants, which were issued in 2012 amid the second institutional bailout era.
The securities are linked to GDP growth, paying out a yield to holders once growth exceeds a pre-set figure.
Bloomberg notes that such instruments have previously been employed by Argentina and Ukraine as a “sweetener” to attract creditors in debt restructuring.
The news agency said Athens filed suit last week against Wilmington Trust, the trustee for the securities, requesting a judgment that will uphold the validity of its attempt to purchase all outstanding GDP-linked warrants set to mature in 2042. The Greek side also wants the UK court, which holds jurisdiction as per the issuance of the instruments, to confirm that the price on the warrants was calculated correctly.
Some of the holders of the specific securities have challenged the validity of a notice issued by the Greek government last month to exercise a re-purchase-before-maturation option that settles Wednesday. Some of the debt holders also questioned the calculation of the call price, Bloomberg added.
