At 10.25% was the interest rate on the Low Collateralized Bond (Tier II) – coupon 10% – which the Eurobank issued yesterday, raising EUR 300 million to cover the MREL (Minimum Equity and Eligible Liabilities – minimum Capital and eligible liabilities).

Applications received by the bank through the application book opened yesterday amounted to 840 million euros, resulting in a 2.7-fold coverage. Declared demand was high, coming from 80 foreign and domestic investors, while the final distribution was 66% for international institutional investors and 34% for domestic investors. The bond is of type 10NC5, i.e. for a period of 10 years, revocable after 5 years and is expected to be rated B2 by Moody’s and B- by Fitch, while being listed on the Luxembourg Stock Exchange.

The issuance is aimed at gradually replenishing the second level bonds in the amount of 950 million euros issued by the bank in 2018 and covered by the Greek state with an interest rate of 6.4%. The bond is callable in 2023, and the bank has the right not to call it, except for the part corresponding to its annual impairment, based on the requirements of the supervisory authorities. Specifically, the Single Resolution Board (SRB) stipulates that Tier II bonds reduce their contribution to the bank’s capital base as they approach maturity by 20% every year after 5 years. The amount of annual impairment for this particular bond is 190 million euros, and the raising by the Eurobank of an additional 110 million euros (total 300 million euros) serves the bank’s rationalization policy and the next steps of the bank in the coming years until 2025 through a smaller amount. editions. The target for covering MREL liabilities by the end of 2025 has been set for Eurobank at 27.36% of risk-weighted assets (RWA). It was preceded in June of this year by the issuance of senior preferred bonds in the amount of 500 million euros with a coupon of 4.375%. Eurobank has eligible securities (mostly senior preferred) for MREL funds in the amount of 1.5 billion euros.