GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
• Subscription agreement: governs the issuance and relationship between the issuer and bondholders. It is often incorporated into the bond programme. • Bondholder agent agreement: the agreement by which a bondholder agent (typically a bank or a financial institution) is appointed to act for all bondholders. Under Greek law, the appointment of such an agent is mandatory for bond loans, among others, when collateral is granted. The bond - holder agent holds all collateral in its own name for the collective benefit of all creditors, manages payments, monitors covenant compliance, and, crucially, is the sole entity legally empowered to declare an event of default and initiate enforcement actions on behalf of the entire syndicate. • Security documents: typically involve pledges or mortgages held by the bondholder agent for the account of bondholders. Agreements among lenders (in the form of intercredi - tor agreements) are commonly negotiated for complex transactions, such as syndicated loans or mezzanine finance structures involving different debt tranches. They are used to vary the priority of payment, security and enforcement rights among a group of lenders. FOLO-like economic arrangements in bond issuances through an agreement among lenders are legally fea - sible under Greek law. However, traditional senior/ mezzanine structures remain the prevailing financing model in the Greek bond market. External factors that influence drafting include Greek Law 5123/2024, which introduced a modernised and unified framework for pledges and security interests over movable assets and claims. This reform signifi - cantly updates bond loan documentation by providing clearer rules and procedures, and improves transpar - ency. 3.3 Restrictions on Foreign Direct Lenders Please refer to 2.1 Licensing and Regulatory Approv- al and 2.3 Restrictions on Foreign Investments . 3.4 Use of Proceeds and Acquisition Financings There are generally no statutory restrictions on a cor - porate borrower’s use of proceeds from credit trans -
actions. Specific limitations may apply if the borrower is a regulated entity. In addition, credit/financial institu - tions and AIFMs are bound by Greek Law 4557/2018 “on the prevention of the use of the financial system for money laundering or terrorist financing”, imple - menting the relevant EU Directives. Restrictions are typically imposed through contractual representations, warranties and covenants within the loan agreements, negotiated between the credit pro - vider and the borrower. Private credit providers in Greece face practical and legal challenges, including the following. • Regulatory hurdles: (a) FDI screening regime (see 2.3 Restrictions on Foreign Investments ); and (b) digital resilience compliance under Law 5193/2025 (implementing EU DORA 2022/2554), imposing strict governance and IT standards on financial entities, and increasing administrative burden. • Structural and financing limitations: (a) bond loans – offer tax benefits and lower reg - istration costs but require an SA borrower and formalities; and (b) financial assistance restrictions – target SAs cannot generally fund or secure the purchase of their own shares (“whitewash” procedures exist but are complex). • Judicial delays – despite reforms, insolvency and enforcement processes remain lengthy. • Market context – private credit is higher-cost than traditional banking and is mainly used for special situations, bridge financing or high-risk projects. 3.5 Debt Buyback Debt buybacks are generally permitted in Greece, par - ticularly within the prevalent framework of bond loans, provided specific structural and legal requirements are met. If the repurchase is made by the issuer itself, the acquired notes must either be immediately cancelled (definitive repayment) or be held for re-issuance, pro - vided the agreement allows for it (revolving structures). Most agreements include specific “purchase of notes/ bonds” or “debt purchase transactions” clauses.
83 CHAMBERS.COM
Powered by FlippingBook