RWE Aktiengesellschaft

DC Decision 10102017

October 10 2017: The EMEA DC determined that: (i) for the purposes of the 2014 ISDA Credit Derivatives Definitions (2014 Definitions), innogy SE (innogy) became the sole Successor to RWE Aktiengesellschaft (RWE) on 20 July 2017 pursuant to Section 2.2(a)(i) of the 2014 Definitions; and (ii) for the purposes of the 2003 ISDA Credit Derivatives Definitions (2003 Definitions) as supplemented by either (a) the 2009 ISDA Credit Derivatives Determinations Committees and Auction Settlement Supplement to the 2003 Definitions published on March 12, 2009 or (b) the 2009 ISDA Credit Derivatives Determinations Committees, Auction Settlement and Restructuring Supplement to the 2003 Definitions published on July 14, 2009 (in each case as supplemented, Updated 2003 Definitions, and together with 2014 Definitions, the Definitions), innogy became the sole Successor to RWE on 20 July 2017 pursuant to Section 2.2(a)(i) of the Updated 2003 Definitions.  Capitalised terms used but not defined in this statement shall have the meaning given to them in the Definitions (as applicable).

Following RWE’s announcement in December 2015 of its intention to split its business to create a new listed company, RWE International SE was renamed innogy on 1 April 2016 and was scheduled to operate under that name from 1 September 2016 onwards. On 30 June 2016, RWE held a Capital Markets Day presentation to introduce innogy and confirmed that “[a]ll senior debt was to be moved to innogy”. In RWE’s 2016 Annual Report, RWE re-confirmed that it was to optimise its financial structure by transferring the bulk of its capital market debt to innogy.  RWE’s intention to transfer such debt and the occurrence of a series of debt transfers from RWE to innogy in sequence indicated the existence of a steps plan, which was complete when two loans granted by the European Investment Bank (EIB Loans) were transferred to innogy on 20 July 2017.  RWE’s Interim Report on the First Half of 2017 Results indicates that the EIB Loans “were transferred from RWE to innogy as part of a debtor switch.  In return, two corresponding group loans were cancelled. With this move, the reallocation of RWE’s capital market debt to innogy, which was agreed as part of the IPO of our subsidiary, is now completed.” 

Under Section 2.2(d) of the 2014 Definitions and Section 2.2(c) of the Updated 2003 Definitions, an entity “succeeds” to Relevant Obligations if it either “assumes or becomes liable for such Relevant Obligations” or issues Bonds “that are exchanged for Relevant Obligations” and, in either case, the Reference Entity is not thereafter an obligor or guarantor with respect to such Relevant Obligations. Where an entity assumes or becomes liable for a Relevant Obligation as guarantor, such guarantee must be a Relevant Guarantee in accordance with the 2014 Definitions. In determining one or more Successors (if any) to RWE for the purposes of the Definitions, the EMEA DC also considered the guarantees in respect of which RWE was replaced by innogy as guarantor of certain bonds issued by innogy Finance BV (previously RWE Finance BV) or Innogy Finance II BV (previously RWE Finance II BV) (Relevant Bonds) and, based on the information available to it, concluded that:

- the guarantees given by RWE of the Relevant Bonds (RWE Guarantees) constitute Qualifying Guarantees and therefore Relevant Obligations;

- RWE has been replaced by innogy as guarantor of the Bonds and RWE is no longer a guarantor/obligor in respect of those Relevant Bonds, which is also confirmed by innogy’s 2016 annual report which states that innogy had become guarantor or debtor of all RWE’s senior bonds; and

- the guarantees given by innogy in respect of the Relevant Bonds constitute Qualifying Guarantees.

Taking into account the relevant debt transfers, the EMEA DC determined that: (i) innogy succeeded to more than 75% of the Relevant Obligations and is the sole Successor to RWE under Section 2.2(a)(i) of the 2014 Definitions and Section 2.2(a)(i) of the Updated 2003 Definitions respectively.

April 21, 2017: The Legal Subcommittee of the EMEA Credit Derivatives Determinations Committee (EMEA DC LSC) met on Wednesday 19, April 2017 to discuss the potential Successor question relating to RWE Aktiengesellschaft (RWE). In December 2015, RWE announced it was splitting its renewable energy, grid and retail business to create a new listed subsidiary, which is now known as Innogy SE.  RWE confirmed, in a presentation at its Capital Markets Day on 30 June 2016, its intention to transfer all capital market debt (including certain loans but excluding hybrids) to Innogy SE.  Whilst some transfers of debt have been effected, further related transfers are anticipated within the next few months.  As such, the EMEA DC LSC has decided that any further deliberations with respect to the potential Successor question relating to RWE should be deferred until such time as all related transfers in the whole are complete.

EMEA DC Decision 21042017

Pursuant to the standing resolution passed by the EMEA Determinations Committee (DC) on June 21, 2010, the first meeting of the EMEA DC to deliberate the DC Questions relating to this DC Issue has been deferred pending deliberation of such DC Questions by the EMEA DC legal subcommittee.

Please refer to EMEA_DC_Standing_Resolution_210610.