Greylock Capital Management, LLC is a U.S. Securities and Exchange Commission registered alternative investment adviser that invests in undervalued, distressed, and high yield assets worldwide, particularly in emerging and frontier markets. As is the case with comparable funds, the firm's investor base consists largely of institutional investors and a limited number of high net worth individuals. As a group, institutional investors may include banks, credit unions, insurance companies, pension funds, hedge funds, REITs, endowments and mutual funds. As is common with many asset management firms, Greylock Capital is organized across a series of onshore and offshore limited partnerships.
Greylock Capital and its partners have participated on a number of corporate and sovereign debt restructurings in emerging markets. A selection of the firm's sovereign debt restructurings is below.
Argentina
Greylock Capital Founder Hans Humes served as co-chair of the Global Committee of Argentina Bondholders following the Argentine Republic's debt default in 2002. The Argentine default is the largest sovereign default in history.
Greece
Greylock Capital served on the 12-member steering committee of investors engaged in the Greek sovereign debt restructuring. The firm was the sole American representative on the Greek bond steering committee, which controlled approximately 20% of all outstanding external Greek government debt. Greylock Capital was cited as one of the earlier fund investors in Greek debt, investing as early as 2011 when the bonds were trading as low as 12 cents on the dollar. Greylock Capital promoted the concept of debt warrants, whereby Greek government repayments were tied to economic growth. The subsequent exchange offer was the largest sovereign debt restructuring in history.
Belize
Following Belize's 2012 default on approximately US$500 million debt, a creditor committee of approximately 20 institutions formed. The creditor committee was co-lead by Greylock Capital and Zurich Insurance Group and several multi-lateral institutions were engaged as part of the restructuring process (i.e. the International Monetary Fund, the Inter-American Development Bank, the Caribbean Development Bank, US Department of Treasury, Institute of International Finance and Paris Club. A restructuring was concluded with the government in 2012 that achieved 86% investor participation. Such high participation rates are desired by countries undergoing debt restructuring because it significantly reduces the likelihood of future investor-initiated litigation.
Mozambique
A global creditor committee formed in 2016 following Mozambique's announcement of default on its outstanding external sovereign debt. Committee discussions focused on the need to create near-term fiscal space for the country, which remains one of the world's poorest, while preserving upside for bond investors associated with Mozambique's vast offshore gas reserves. Consideration was also given to initiatives to improve transparency and resolve the scandal around undisclosed loans, both of which were viewed as critical in the country's efforts to normalize its relationship with the IMF and bilateral donors. Greylock Capital led the negotiations that resulted in a preliminary agreement on restructuring terms that were finalized in late 2019. An exchange offer for the existing bonds closed inOctober 2019 with a final participation rate in excess of 98%.
In October 2019, Barbados came agreed to terms with a creditor committee that allowed the country to restructure its approximately 7bn USD in sovereign debt. The creditor committee, co chaired by Eaton Vance Management and Greylock Capital, agreed to terms including an estimated 26% principal haircut and a new instrument maturing in 2029. The new bond includes a "Hurricane Clause", which allows the island to suspend payments and capitalize interest in the event of a weather-related disaster.
Liberia
Greylock Capital served on the creditor committee of an investor group restructuring Liberia's pre-crisis debt, a transaction which enabled the country to regain international capital. As the largest commercial creditor to Liberia, Greylock Capital used its strong relationships with the existing government to lead a committee of investors to work with multi-lateral and non-financial partners to provide a framework for a successful restructuring of outstanding Liberian claims. The restructuring, completed in April 2009, featured several innovative elements, including Liberia's ability to do a significant, one-time only restructuring of all commercial claims. Unlike so-called vulture funds, Greylock Capital was highlighted for its negotiated method of sovereign debt restructuring.
Ivory Coast
After having issued $2.8 billion in Brady Bonds in 1998, the Republic of Ivory Coast defaulted on the debt in 2002 upon the outbreak of a civil war. Greylock Capital participated in the Republic's creditor committee and played a lead role in closing a deal between the republic and bondholders. Greylock Capital engaged multilateral institutions, including the World Bank, in order to effect a restructuring that was compatible with creditor rights and with the principles of debt relief under the HIPC Initiative. The Ivory Coast restructuring was completed in 2010.
