An amount of 500 million euros has been raised Eurobank through senior issue of preferred bonds to meet the target for minimum equity requirements and eligible liabilities, known as MREL liabilities. The coupon was set at 7% (yielding 7.125%) and, combined with strong demand, as well as the quality of the participating investors, confirms, according to bank sources, “the success of the issuance.”

Specifically, the book closed with offers of €1.26bn, with overcovering around three times the originally requested amount, which was set at €400m, while demand rose to €1.5m during book formation. billion euros. . The issue was attended by 110 high-end investors (hedge fund participation was low) and based on placement data, it was covered by approximately 70% foreign institutional investors and approximately 30% Greek institutional investors. The title has a term of 6 years, revocable after 5 years, and has been issued by BNP Paribas, Goldman Sachs Europe, HSBC, IMI-Intesa San Paolo and UBS.

The yield on the 6-year bond is set at 7.125% – at the level of 1.26 billion submitted offers.

The Eurobank issuance is the first Greek bank in 2023 and comes just after the state’s successful entry into the markets in an attempt to capitalize on good sentiment well before the country’s official entry into the pre-election period. The prospect of an election could affect Greek banks’ market access plans depending on the timing as well as the time it takes to form a government, so the EBRD is rushing to take advantage of the time that has passed to avoid collecting all the publications. in the second half of the year. It should be noted that Greek banks have planned to issue bonds worth about 2-2.5 billion euros for 2023, and based on the election outlook, it is possible that other banks will take similar steps. To the time constraints that should be taken into account for the first quarter of the year, i.e. before the official announcement of the elections, there is also a “white” period, which begins at the end of February in connection with the planned publication of the 2022 annual results bulletin.

Since May 2021, Eurobank has issued senior preferred bonds totaling €1.5 billion, and in December it issued second-tier bonds worth €300 million. Following the respective issuances and internal capital creation, the bank’s MREL ratio is 21.3% based on the latest available data, exceeding the target set by the competent supervisory authorities for the MREL ratio of 20.45% in January 2023. Until 2025, which is the deadline set by the SRB (Single Resolution Board), the MREL index should reach 27.36% of the risk-weighted assets (RWA) of the group.