The Financial Supervisory Authority finds Taconic Capital Advisors LP and its associated entities eligible to acquire a qualifying holding in Arion banki hf.
The Financial Supervisory Authority has today concluded that Taconic Capital Advisors LP and its associated entities are eligible to acquire a qualifying holding in Arion banki hf. up to 33% of the banks shares and its subsidiaries Stefnir hf., Valitor hf., Vörður tryggingar hf. and Vörður líftryggingar hf., with reference to Chapter VI of the Act No. 161/2002 on Financial Undertakings and Chapter X of the Act No. 100/2016 on Insurance Activities.
The decision takes effect when the Authority's conditions from 8 January 2010 for Kaupþing ehf.'s ownership of Arion bank hf. through Kaupskil ehf. will be terminated, at the latest when shares in the bank are admitted to trading on a regulated market.
The Financial Supervisory Authority has also concluded that Taconic Capital Advisors LP and associated entities and Kaupþing ehf. are acting in concert within the meaning of Point 25c of Paragraph 1 of Article 1a of the Act on Financial Undertakings, cf. Chapter VI of the same Act. Their combined qualifying holding in the bank can therefore only be up to 33%.
The Financial Supervisory Authority shall assess whether a party intending to acquire a qualifying holding is qualified to own the holding, having regard to the sound and prudent operation of the financial undertaking. The assessment is based on the criteria set out in Paragraph 2 of Article 42 of the Act on Financial Undertakings. The European Supervisory Authorities' Guidelines from 2008 and 2016 are also taken into consideration.[1]
The Financial Supervisory Authority assessed the eligibility of the investment entity TCA New Sidecar III S.à r.l., having its registered address in Luxembourg, to acquire a direct qualifying holding in Arion banki hf. TCA New Sidecar III S.à r.l. currently holds approximately 9.99% of the shares in Arion banki hf.
The Authority also assessed the eligibility of the investment entities TCA Opportunity Investments S.à r.l., TCA Event Investments S.à r.l. and TCA Sidecar II S.à r.l., which all have its registered address in Luxembourg, to acquire an indirect qualifying holding in Arion banki hf. The entities currently hold approximately 40.67% of the shares in Kaupþing ehf. resulting in an indirect stake of approximately 23.35% in the bank.[2]
The following parties' eligibility to acquire an indirect qualifying holding in Arion banki hf. was also assessed by the Financial Supervisory Authority:
- TCA Opportunity Holding S.à r.l., having its registered address in Luxembourg, which is TCA Opportunity Investments S.à r.l.'s holding company.
- TCA Event Holding S.à r.l., having its registered address in Luxembourg, which is TCA Event Investments S.à r.l.'s holding company.
- Taconic Sidecar Master Fund SPC, segregated portfolios II and III, having its registered address in the Cayman Islands, which funds TCA Sidecar II S.à r.l. and TCA New Sidecar III S.à r.l.
- Taconic Sidecar GP LLC, having its registered address in the United States, as Taconic Sidecar Master Fund SPC's general partner.
- Taconic Opportunity Master Fund LP, having its registered address in the Cayman Islands, which funds TCA Opportunity Investments S.à r.l. through TCA Opportunity Holding S.à r.l.
- Taconic Associates LLC, having its registered address in the United States, as Taconic Opportunity Master Fund LP's general partner.
- Taconic Master Fund 1.5 LP, having its registered address in the Cayman Islands, which funds TCA Event Investments S.à r.l. through TCA Event Holding S.à r.l.
- Taconic Capital Partners LLC, having its registered address in the United States, as Taconic Master Fund 1.5 LP's general partner.
- Taconic Capital Advisors LP, as the investment manager for Taconic Sidecar Master Fund SPC, Taconic Opportunity Master Fund LP, Taconic Master Fund 1.5 LP, TCA New Sidecar III S.à r.l., TCA Opportunity Investments S.à r.l., TCA Event Investments S.à r.l. and TCA Sidecar II S.à r.l. Taconic Capital Advisors LP is authorised and regulated by the US Securities and Exchange Commission as an investment manager in the United States. It also engages in licensed activities in the United Kingdom and Hong Kong.
- Taconic Capital Performance Partners LLC, having its registered address in the United States, as Taconic Capital Advisors LP's general partner.
- Frank Brosens, which has a controlling stake in Taconic Capital Performance Partners LLC.
The largest investors in aforementioned funds, Taconic Sidecar Master Fund SPC, Taconic Opportunity Master Fund LP and Taconic Master Fund 1.5 LP, are North American and European based institutional investors, pension and endowment funds and family offices.
The Financial Supervisory Authority's assessment was based on Taconic Capital Advisors LP and its associated entities' notification, its enclosed documents and other information the Authority obtained from the parties. The assessment was also based on information provided from relevant foreign financial supervisory authorities.
The Financial Supervisory Authority's assessment emphasised that Arion banki hf. is a systemically important financial undertaking as defined by the Financial Stability Council. Therefore, it was specifically examined whether Taconic Capital Advisors LP and its associated entities' have the ability to provide additional capital to Arion banki hf. under special circumstances.
[1] Guidelines for the prudential assessment of acquisitions and increases in holdings in the financial sector required by Directive 2007/44/EC (CEBS/2008/214) and Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01).
[2] Kaupþing ehf. holds a 57.42% share in Arion banki hf. through Kaupskil ehf. The ownership is subject to conditions set by the Financial Supervisory Authority on 8 January 2010.