The book for the new senior preferred bond of Piraeus Bank has opened, with an initial interest rate set at 7.125%. The target is to raise 500 million euros.

This marks the bank's second market entry for the year, and the issuance aims to use the funds to accelerate the strengthening of minimum own funds and eligible liabilities (MREL) requirements. That is to achieve the goal set by the Single Resolution Board (SRB) for the end of 2025. 

Given that this year's MREL needs have already been covered, the raised capital will be directed towards financing the requirements for 2024. Piraeus Bank has already met the MREL target for January 1, 2024, set at 21.8% of risk exposure, positioning it well regarding the final MREL target for January 1, 2026.

BNP Paribas, BofA Securities, Deutsche Bank, Goldman Sachs Bank Europe SE, Morgan Stanley, and UBS act as joint bookrunners of the issue. The new senior preferred bond has a maturity of six years with the option for redemption after five years and will be listed on the Luxembourg Stock Exchange. Moreover, it is expected to receive a Ba2 rating from Moody’s and BB- from Fitch.

Despina Vassilopoulou