New Eurobank shares to trade at a discount

Greece’s plan to return Eurobank to the private sector will see the lender issue new shares to investors at a discount to the price the country’s bank rescue fund paid to recapitalize it, the head of the fund said on Wednesday.

Greece faces a March 2014 deadline set by the EU/IMF officials overseeing its bailout to return Eurobank to the private sector, either fully or partially.

The lender was the only one of Greece’s four systemically important banks to have its recapitalization needs met solely by the Hellenic Financial Stability Fund (HFSF) in the summer, with no private sector participation.

The HFSF owns 95 percent of Eurobank, Greece’s fourth-largest lender.

The rescue fund pumped 5.84 billion euros into Eurobank in a share issue in June to restore the lender’s capital ratio to close to 9 percent.

It subscribed for the entire issue, at 1.54 euros a share.

“The price of the new share issue will be lower than the price [of the shares bought] in the recapitalization,” HFSF Chief Executive Anastasia Sakellariou told reporters.

The new share issue will be aimed at institutional investors, rather than the smaller retail investors who own the 5 percent of the bank not held by the HFSF.

A source close to the planned transaction told Reuters last month that Eurobank would issue more than 1 billion euros of new stock to private investors.

It has not been announced when the share issue will take place.


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