Piraeus Financial Holdings S.A. announces that its subsidiary, Piraeus Bank S.A. (“Piraeus” or the “Bank”), has successfully completed the pricing of a new €650 million Green Senior Preferred Bond (hereinafter also called the “Bond”) at a yield of 4.625%, attracting the interest of a large number of institutional investors. The Bond is expected to be assigned an investment grade rating of “Baa3” from Moody’s. The Bond has a maturity of five (5) years and an embedded issuer call option after four (4) years. Settlement will take place on 17 July 2024 and the notes will be listed on the Luxembourg Stock Exchange’s Euro MTF market. The proceeds of the issuance will be directed in financing eligible green assets originated by the Bank that will contribute to achieving carbon neutrality by 2050 and are expected to provide positive environmental impact.
Following the new issuance, the Bank’s minimum requirements of own funds and eligible liabilities (MREL) ratio stands at 28.0%1 , comfortably meeting the final binding MREL requirement, a year ahead of the deadline set by the supervisory authorities. Piraeus is the first Greek bank to meet the final binding MREL requirement, while the respective ratio is expected to exceed 28% at end-2024.
The transaction attracted significant interest from more than 200 institutional investors, with 70% placed among asset managers, insurance companies and pension funds, 21% to banks and private banks, 7% to hedge funds and 2% to other investors. More than 85% of the issue was allocated to international institutional investors, while more than 75% was allocated to ESG focused accounts.
The total order book of the transaction exceeded €4.1 billion, being more than 8.2 times oversubscribed compared to an initial issuance target of €500 million, the biggest book on record for Greek banks’ senior debt issuance in the recent years. On the back of strong investor interest, the final yield was set at 4.625%, versus an initial guidance of 5.00% and final issuance size was set at €650mn.
The success of the transaction is a clear testament of investor confidence in Piraeus Bank, following the recent upgrade to investment grade from Moody’s Ratings, with the new Green Senior Preferred Bond being the first offering from a Greek bank having an investment grade rating. This is further reflected in the tightest credit spread for a similar transaction in recent years, at c.170bps, which is more than 50bps lower than the spread required in the Senior Preferred Bond issued in April 2024 and more than 200bps lower than the spread required in the Senior Preferred Bond issued in November 2023.
BNP Paribas, BofA Securities (B&D), Commerzbank, HSBC Continental Europe and IMI - Intesa Sanpaolo, acted as joint bookrunners of the issue. Ambrosia Capital and Piraeus Bank S.A. acted as co-managers of the issue. Allen & Overy and Bernitsas Law Firm acted as legal advisors to Piraeus.
Athens, 11 July 2024