News & Events

The Firm recently represented Morgan Stanley and UBS Investment Bank, as dealer-managers, in a US$1 billion restructuring of two series of outstanding external bonds of The Dominican Republic.  Under an exchange offer conducted by the Republic, holders of the Republic's outstanding 9.50% Bonds due 2006 and 9.04% Bonds due 2013 were entitled to exchange their bonds for new 9.50% Amortizing Bonds due 2011 and 9.04% Amortizing Bonds due 2018, respectively.  Holders tendered approximately 93.64% of the aggregate principal amount of both series of outstanding bonds in the exchange offer.

The restructuring was necessitated by a severe economic crisis in The Dominican Republic that was precipitated by the May 2003 collapse of the country's second largest commercial bank.  The banking crisis was followed by, among other negative conditions, decreases in GDP, substantial increases in the government's budget deficit, a sharp depreciation of the Dominican peso and difficulty on the part of the Republic in servicing its external and internal debt.  In February 2005, Standard & Poor's downgraded the Republic's foreign currency debt to "SD" (Selective Default).

The exchange offer constituted part of the Republic's program to restructure or reschedule its external and domestic debt, in accordance with agreements with the International Monetary Fund (IMF) and the Paris Club of bilateral creditors.  The debt relief sought by the Republic through the exchange offer and the other parts of the Republic's restructuring program is built into fiscal and technical targets agreed with the IMF.  The fulfillment of these targets is a condition of the future availability of funds under the Republic's 2005 Stand-By Arrangement with the IMF.

The STB team for the transaction consisted of Glenn M. Reiter, Jaime Mercado, Sandra Treusdell, Nancy Mehlman (tax) and former associate Jeffrey Mensch (tax).