Public Debt Management Agency: The Greek State was vindicated for the discounting of debt securities

The Public Debt Management Organisation (PEMO), has announced that it has secured a major victory in the High Court of England.

Britain: Greek government vindicated for discounting debt securities

Summary of the ODIHR states:

The Greek government has been granted the right to claim the Greek government’s right to claim the Greek government’s interest in the Greek sovereign debt.

In a judgment delivered by the Honourable Mr Justice Bright, the Court upheld the exercise of the Hellenic Republic’s contractual right to repurchase the GDP-linked securities and confirmed that Greece correctly determined the repurchase price in accordance with the contractual pricing mechanism.

Following a two-day hearing on 21 and 22 April this year, the Court issued a declaratory judgment confirming that Greece had validly exercised its right to repurchase under clause 6.1 of the terms and conditions of the GDP-linked securities. The Court further stated that the repurchase price of EUR 252.28 per 1.000 securities was correctly calculated and determined by reference to the bid and offer prices provided by the Bank of Greece’s Electronic Secondary Securities Market (ESM) during the relevant 30 days of trading, as required by the terms and conditions of the securities.

The Court further stated that the purchase price of 252.28 per security was correctly calculated and determined by reference to the bid and offer prices provided by the Bank of Greece’s Electronic Secondary Securities Market (ESM) during the relevant 30 days of trading, as required by the terms and conditions of the securities.

The case concerned GDP-linked securities issued by Greece in 2012 as part of its sovereign debt restructuring, with a total nominal amount exceeding €62 billion, making them the largest series of GDP-linked securities ever issued by a sovereign state. The dispute arose after some investors questioned the legality of the Greek State’s repurchase notice and the methodology used to determine the repurchase price. Greece has requested a declaratory judgment from the English courts in order to resolve these issues definitively.

In a detailed judgment, the Court rejected arguments that the pricing should have been derived from alternative market sources and confirmed that Greece had correctly applied the contractual framework in setting the price.

This case stands out for its innovative use of the declaratory judgment to issue a single decision on the application of a complex financial instrument, avoiding fragmented court proceedings and contradictory decisions and providing certainty to issuers and other affected parties. The Court approved the use of a declaratory judgment in these circumstances as the “most efficient” way to resolve the dispute.

“We welcome the decision of the High Court of England and the clarity it provides to security holders and the wider market. The decision confirms Greece’s commitment to act in good faith and in accordance with the applicable contractual framework,” said Dimitris Tsakonas, Director General of the Hellenic Financial Markets Authority.

The Hellenic Republic was represented by law firm Cleary Gottlieb Steen & Hamilton LLP through a team led by partners Jim Ho and Naomi Tarawali, with key associates Emma Williams and Georgina Evison and barristers Alain Choo Choy KC and Sam O’Leary of One Essex Court.

Case number: The Hellenic Republic v. Wilmington Trust (London) Limited (Defendant as Trustee under a Trust Deed dated 9 March 2012 with the Hellenic Republic) [2026] EWHC 1049 (Comm).