Piraeus Bank has successfully completed the pricing of a new €650 million High Priority Green Bond with a yield of 4.625%, attracting the interest of a significant number of institutional investors, according to an announcement.

Specifically, the Piraeus Bank Bond has a five-year maturity with a call option at 4 years and is expected to receive an investment grade of "Baa3" from Moody's Ratings.

The settlement date is July 17, 2024, and the bonds will be traded on the Luxembourg Stock Exchange's Euro MTF Market.

The proceeds of the issue will be used to finance eligible green investments by the bank and will contribute to the goal of a neutral energy footprint by 2050 and a positive environmental impact.

The new issue sets the Minimum Requirement for Own Funds and Eligible Liabilities ("MREL") ratio at 28.0%, achieving the final, legally binding MREL target a year ahead of the regulators' deadline.

Piraeus is the first Greek bank to achieve the final binding MREL target, while the ratio is expected to be above 28.0% by the end of 2024.

The transaction attracted strong investor interest, with over 200 institutional investors participating, with 70% allocated to fund managers, insurance companies, and pension funds, 21% to 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 investors.

The transaction's total order book exceeded €4.1 billion, which is more than 8.2 times the original €500 million issue target and the largest book ever recorded in a High Priority Senior Notes issue by a Greek bank in recent years. Based on investor interest, the final yield was 4.625%, against an initial target of 5.00%, and the final issue amount was €650 million.

The success of the issue is a clear confirmation of investor confidence in Piraeus Bank, following the recent upgrade to investment grade by Moody's Ratings, with the new High Priority Green Bond being the first new bond issue by a Greek bank to carry the investment grade rating.

The success is further reflected in the historically low credit spread of approximately 170 bp for the transaction, which is more than 50 bp lower than the spread of the April 2024 issue and more than 200 bp lower than the spread of the November 2023 issue.

BNP Paribas, BofA Securities (B&D), Commerzbank, HSBC Continental Europe, and IMI-Intesa Sanpaolo acted as coordinating lead underwriters for the offering book.

Ambrosia Capital and Piraeus Bank acted as coordinators of the bid book. Allen & Overy and Bernitsa Law Firm acted as legal advisors to Piraeus.