HEMA Bondco I B.V.

Event Publicly Available Information:

Has a Failure to Pay Credit Event occurred with respect to HEMA Bondco I B.V.?

The Eligible Market Participant that submitted the DC Question included the following information:

Bloomberg News Article (available via Bloomberg Terminal): "Moody’s appends limited default (LD) designation to Hema’s PDR after payment default"

Yahoo News Article

Moody’s Rating Report

The EMEA DC has determined that a Failure to Pay Credit Event has occurred with respect to HEMA Bondco I B.V. .


Auction Settlement Terms	Final Auction Settlement Terms DC Statement in respect of Final Auction Settlement Terms The Auction Settlement Terms in respect of HEMA Bondco I B.V. have been amended to facilitate the efficient operation of the Auction and settlement of the Representative Auction-Settled Transactions. When the CDS market moved towards Auction Settlement as the standard form of settlement rather than Physical Settlement, one of the guiding principles was that, so far as possible, market participants should not be prejudiced by the change. So, for example, it would be unfair if there are good Deliverable Obligations that survive the occurrence of the relevant Credit Event – and so the CDS trade could have been immediately physically settled – but these obligations have been impaired in some way by the time the Auction takes place (such that they cease to be Deliverable Obligations). The DC may seek to avoid this prejudice by making appropriate amendments to the Auction Settlement Terms. This approach is provided for in Section 3.2(d) of the DC Rules and is discussed in more detail in the EMEA DC Explanatory Statement in respect of Steinhoff Europe AG (dated 13 September 2019). In relation to HEMA Bondco I B.V., the debt is currently going through an English Scheme of Arrangement process and so the DC resolved to apply the principle set out in Section 3.2(d) of the DC Rules. The DC has resolved to include the 2022 Senior Secured Notes of the Reference Entity on the Final List, notwithstanding any contingencies that may now exist under the Scheme, on the basis that had Physical Settlement applied, a protection buyer that was holding non-locked up 2022 Senior Secured Notes could have delivered such debt in settlement of a CDS transaction prior to any such contingencies being introduced. Similarly, the DC has reserved the ability to supplement the Auction Settlement Terms to address settlement of the Representative Auction-Settled Transactions to the extent that the on-going Scheme of Arrangement process is completed during the Physical Settlement Period. The timelines for settlement of Representative Auction-Settled Transactions has also been adjusted in light of the on-going Scheme of Arrangement process. Note that the Auction Settlement Terms will only apply to Transactions that specify as the Reference Obligation (i) the Senior Secured Notes due 2022 of the Reference Entity (ISINs: XS1647643466 (Rule 144A) and XS1647643110 (Regulation S)); (ii) the €250,000,000 Senior Secured Floating Rate Notes due 2019 issued by the Reference Entity (ISINs: XS1075852571 (Rule 144A) and XS1075799319 (Regulation S); or (iii) the €315,000,000 6.25% Senior Secured Fixed Rate Notes due 2019 issued by the Reference Entity (ISINs: XS1075853207 (Rule 144A) and XS1075833860 (Regulation S). If a Transaction does not specify one of these obligations as the Reference Obligation then it will not be covered by the Auction Settlement Terms (unless the parties bilaterally agree otherwise). Accordingly, such Transactions will fall back to Physical Settlement.

Deliverable Obligations	Final List

Timeline	Event Determination Date: 18 August 2020 12:00 pm London time on Monday 7 September 2020: deadline for any market participant who wishes to participate in the HEMA Bondco I B.V. Auction to submit a Participating Bidder Letter to the DC Secretary. Please contact the DC Secretary as soon as possible (and in any event ahead of the deadline) for further details. 5.00 pm London time on Monday 7 September 2020: deadline for submission of Customer Physical Settlement Requests to the relevant Participating Bidder. Tuesday 8 September 2020: Auction Date. 4.00pm London time on Wednesday 9 September 2020: deadline for Buyers to deliver Notices of Physical Settlement to Sellers in respect of any Representative Auction–Settled Transactions. Friday 11 September 2020: Auction Settlement Date. 4.00pm London time on 14 September 2020: deadline for Sellers to deliver Notices of Physical Settlement to Buyers in respect of any Representative Auction–Settled Transactions. Monday 28 September 2020: Physical Settlement Date in respect of any Representative Auction–Settled Transactions.

Upcoming DC Meetings
This Event
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All Meetings
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Additional Information

Issue Number:

2020081702

Submitted by:

General Interest Question

Category:

Credit Event

Coverage Election:

2014 Definitions

Status:

Closed

Outcome:

Question Decided
Procedural History
- Closed
  
  9/29/2020 04:00am EDT
- List of Participating Bidders Published
  
  List of Participating Bidders
  EMEA DC Decision
  
  9/07/2020 06:35am EDT
- Final Auction Terms Published
  
  Final Auction Settlement Terms
  Compare of Final Auction Settlement Terms against Draft Auction Settlement Terms
  DC Decision
  The related DC Statement has been posted in the centre of this page for ease of reading (to the left of this message).
  
  9/05/2020 06:15am EDT
- Final List Published
  
  Final List
  9/05/2020 06:15am EDT
- Supplemental List Published
  
  Supplemental List
  If an Eligible Market Participant wishes to challenge an obligation on Supplemental List, please contact the DC Secretary by 6pm London time on 3 September 2020.
  9/03/2020 09:05am EDT
- Initial List Published
  
  Initial List
  Instructions for submission of potential Deliverable Obligations
  
  9/02/2020 04:35pm EDT
- Draft Auction Terms Published
  
  HEMA Bondco I B.V. Draft Auction Settlement Terms
  Compare against Wirecard AG Auction Settlement Terms
  DC Decision 02 September 2020
  EMEA DC – 2 September 2020
  The EMEA DC has published the draft Auction Settlement Terms for the Auction to be held on 8 September 2020 in respect of HEMA Bondco I B.V. . Note that these Auction Settlement Terms will only apply to Transactions that specify as the Reference Obligation either the Senior Secured Notes due 2022 of the Reference Entity (ISINs: XS1647643466 (Rule 144A) and XS1647643110 (Regulation S)) or the previous Senior Secured Notes of the Reference Entity. The previous Senior Secured Notes were (i) the €250,000,000 Senior Secured Floating Rate Notes due 2019 issued by the Reference Entity (ISINs: XS1075852571 (Rule 144A) and XS1075799319 (Regulation S); and (ii) the €315,000,000 6.25% Senior Secured Fixed Rate Notes due 2019 issued by the Reference Entity (ISINs: XS1075853207 (Rule 144A) and XS1075833860 (Regulation S).
  Please contact the DC Secretary with any comments in relation to the draft Auction Settlement Terms by no later than 5pm London time on Thursday 3 September 2020.
  The EMEA DC has also published an Initial List. The EMEA DC has varied the timetable for finalising the list of Deliverable Obligations to facilitate the Auction Date.
  If an Eligible Market Participant wishes to propose an additional obligation for inclusion on the Supplemental List, please contact the DC Secretary by 1pm London time on 3 September 2020. The Supplemental List will be published shortly after the deadline. If an Eligible Market Participant wishes to challenge an obligation on the Initial List or Supplemental List, please contact the DC Secretary by 6pm London time on 3 September 2020.
  The DC will aim to publish the Final List by 4 September 2020.
  9/02/2020 04:35pm EDT
- Ongoing
  
  The EMEA DC met on Tuesday 1 September 2020. The EMEA DC agreed to hold an Auction in respect of HEMA Bondco I B.V. on 8 September 2020. A draft set of Auction Settlement Terms and the Initial List will follow separately.
  9/01/2020 12:59pm EDT
- Ongoing
  
  The EMEA DC met on 27 August 2020 to discuss the Auction in respect of HEMA Bondco I B.V. . The EMEA DC will reconvene on 1 September 2020 to continue discussions.
  8/27/2020 09:10am EDT
- Ongoing
  
  DC Decision 21 August 2020
  EMEA DC Meeting Statement 21 August 2020
  The EMEA DC met on Friday 21 August 2020 to discuss whether a Failure to Pay Credit Event had occurred with respect to HEMA Bondco I B.V. (the Reference Entity) due to the non-payment of interest on the Senior Secured Floating Rate Notes due 2022 issued by the Reference Entity (the SSNs).
  The EMEA DC considered the Publicly Available Information submitted by the Eligible Market Participant that raised the DC Question. The EMEA DC had also separately received confirmation that the relevant interest payment was not made and that the grace period had expired. As a result, the EMEA DC determined that the Reference Entity had failed to make payments in respect of the SSNs in excess of the Payment Requirement and that the applicable Grace Period had expired.
  The EMEA DC also considered the 2019 Narrowly Tailored Credit Event Supplement to the 2014 Credit Derivatives Definitions and concluded that there was sufficient Eligible Information to determine that the Credit Deterioration Requirement was satisfied.
  Accordingly, the EMEA DC concluded that a Failure to Pay Credit Event had occurred with respect to the Reference Entity and the date of the Failure to Pay Credit Event was 14 August 2020. The EMEA DC will meet again in due course to discuss the Auction in respect of the Reference Entity.
  8/21/2020 11:55am EDT
- Ongoing
  
  DC Decision 19 August 2020
  The EMEA DC met on 19 August 2020 to discuss the DC Question in respect of HEMA Bondco I B.V. The EMEA DC will reconvene on 21 August 2020 to continue discussions.
  8/19/2020 07:15pm EDT
- Request Accepted by DC
  
  8/17/2020 01:10pm EDT
- Pending DC Consent
  
  8/17/2020 12:25pm EDT