EIB to Help Piraeus Bank in Supporting Small Greek Businesses

The European Investment Bank (EIB) has announced it will invest 350 million euros in Piraeus Bank covered bond next month, as part of efforts to increase small business lending in Greece.

This will mark the first time that an international financial organisation has invested in covered bonds issued by a Greek bank since the country’s debt crisis began in 2010.

Piraeus Bank, Greece‘s largest lender by assets, plans to issue a five-year 500 million euro bond. EIB believes the bond placement will help Piraeus Bank to diversify its funding sources and boost its lending capacity, while also sending a signal of confidence.

Credit Suisse is the dealer manager of the issue. Under the deal, Piraeus Bank has committed to fund 700 million euros of new investments by small and medium-sized firms across Greece, EIB officials said.

The European Investment Fund (EIF) will buy another 50 million euros of the bond, with the European Bank for Reconstruction and Development (EBRD) also providing financial backing.