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Eurobank opens book for capital increase

By Yiannis Papadoyiannis

Eurobank opens the book for its 2.86-billion-euro share capital increase on Friday. The lender announced on Thursday that the price range for the new shares is between 0.30 and 0.33 euros per share. Sources say that dozens of institutional investors from abroad and other investment firms have expressed their intention to participate, so along with the strategic investors, some 4 billion euros have already been offered.

Given the extent of the demand, it is possible that the final price will reach the top of the range i.e. significantly higher than the 0.30 euros per share offered by strategic investors. In that case, according to the signed agreement, the strategic investors will either have to raise their offer to the level of the book or opt out of participating in the transaction. Eurobank officials estimate that the strategic investors will choose to raise their offer.

The lender announced on Thursday that from Friday morning until Tuesday it will be inviting offers for the sale of up to 954,666,667 new shares in Greece and 8.592 billion shares to international investors. This means that 90 percent of the increase, or funds of 2.574 billion euros, will be covered by foreign investors.

Given the strong investor interest, analysts are taking it for granted that the entire increase will be covered by the private sector. Once the process has been completed, the strategic investors will control 30 percent of Eurobank, institutional and private investors will hold 35 percent and the participation of the Hellenic Financial Stability Fund (HFSF) will go down to just 35 percent from 95 percent today.

National Bank of Greeces return to the interbank market was very successful on Thursday, as its bond issue was not only oversubscribed but also secured an interest rate considerably lower than that of the sovereign bond issued by Greece a few days ago.

The 750-million-euro issue was covered more than three times as investors offered funds adding up to 2.5 billion euros. The yield of the bond was set at 4.5 percent with a 4.375 percent coupon.

NBG group officials made no secret of their satisfaction with the response of the international investor community and particularly issues terms and interest rate. They underlined that it is particularly rare for a bank to draw liquidity on better terms than its own country, which reflects the great prestige it enjoys.

ekathimerini.com , Thursday April 24, 2014 (23:50)  
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