Piraeus Bank, Greece’s largest lender, secured a major capital boost on Wednesday, raising 400 million euros through the issuance of a bond.
The interest rate amounted to 9.75 percent and the offers book, overseen by Goldman Sachs International and UBS, came to 850 million euros, as over 135 institutional investors from more than twenty countries took part in the transaction.
The first such bond issue by a Greek bank since 2008, the major financial transaction has created optimism in the lender’s administration, with Piraeus’ chief executive officer Christos Megalou expressing satisfaction with the response of the market.
The CEO stated “the high level of investor demand constitutes a tangible vote of confidence in the overall progress recorded by Piraeus Bank. This issue further strengthens our financial balance and serves as a main catalyst in the implementation of our ‘Agenda 2023’ strategic plan to the benefit of our investors, clients and employees.”
Although the interest rate for the bond is considered high, the market views the move positively. Besides being a first for a Greek bank in this decade, it settles an issue which had been pending since last year. It also bolsters the lender’s capital adequacy ratio by about 90 basis points.