Piraeus Bank's Tier 2 bond maturing in 11 years and callable in six years, with a coverage of €2.7 billion and the bank raising €650 million, has closed the tender book. Piraeus' issue, the first time a Greek bank bond is priced not at a nominal rate, as is the case for high yield issuers, but at a spread over the swap rate. This is because the bank's and the country's credit rating has improved.

THE PROCESS

This issue has a spread of 3.15% over swap rate (5.50% interest rate). A tender and repurchase of a previous issue of Piraeus Tier 2 bonds worth €500 million that matures on February 19, 2030, will come after it in order to reduce costs and increase the issue's capital contribution. Those exchanging older securities will have priority in the allocation of the new ones.

THE MREL INDICES

The Bank increased its MREL ratio to 28.3% with the previous Green Bond issue in July, making it the first bank in Greece to reach the final binding target a year before the regulators' deadline of December 2025. MREL is at 28.7% pro forma and will remain at this at the end of the year. Piraeus aims to maintain a margin above the regulatory requirement of 27.9% MREL.

INVESTORS

The bank had instructed Barclays, Deutsche Bank, Goldman Sachs Bank Europe SE, Morgan Stanley, Nomura, and UBS Investment Bank to initiate communication with investors. The issue is part of Piraeus' EMTN program and is expected to be rated Ba3 by Moody's.