Optimism for the overall success of the recapitalization of the Greek credit sector is growing, as Piraeus Bank followed Alpha in securing the full coverage by private investors of its share capital increase as far as the minimum private participation is concerned.
Consequently, out of a total of 2.36 billion euros that National, Alpha and Piraeus need to draw from the market, 1.2 billion has already been secured. After Alpha managed to get 457 million euros of its share capital increase covered by international financial firms, Piraeus has apparently reached a similar deal.
Sources say that Piraeus has decided against issuing convertible bonds (CoCos) so that the sum of its capital increase from the private sector will amount to 733 million euros. On top of the 570 million euros from strategic investors Millennium bcp and Societe Generale, Piraeus will be getting 163 million euros covered by international firms.
National Bank’s management is also optimistic that private investors will cover 12 percent of its share capital increase totaling 9.75 billion euros, that is 1.17 billion euros. Sources say that a great number of shareholders as well as new investors have committed to participating in the capital increase, with bank officials saying they are confident the target will be met. The minimum rate of increase coverage for the bank to avoid nationalization is 10 percent.
In the context of its effort to strengthen its capital base, National’s management announced on Wednesday the submission of a public offering for the buyback of hybrid securities with a total nominal value of 176.8 million euros. That should boost its capital base by up to 106 million euros, as holders will get 40 percent of their bonds’ value in cash.
The optimism for the success of the recapitalization project, which is seen as vital for the country’s economic rebound, was reflected in the major growth of banking stocks during yesterday’s bourse session, led by National.