EBRD buys slice of NBG covered bond


The European Bank for Reconstruction and Development said on Thursday it had invested in the first publicly sold covered bond issued by a Greek bank since the government in Athens returned to international bond markets this year.

The development bank said it bought 30 million euros of the 750-million-euro offering by the National Bank of Greece.

NBG’s covered bonds – debt backed by collateral such as mortgages – is the first debt sold publicly by a Greek bank since the sovereign made a high-profile return to bond markets in July.

“This [NBG transaction] sends a strong signal to foreign and domestic investors that after many tough years the outlook for Greece has changed remarkably for the better,” EBRD official Lucyna Stanczak-Wuczynska said in a note.

“The high demand shows us that appetite has returned, and this is good news for Greece and a reward for some painful adjustments.”

Greece was locked out of bond markets for three years as doubts grew over its ability to meet its debt obligations, as international creditors withheld aid on grounds the country was not implementing reforms adequately.

Following NBG, Greek lender Eurobank is also in talks with investors with a view to selling covered bonds.

Last month, the EBRD agreed to join the European Investment Bank and the European Investment Fund in backing a 700 million private placement of covered bonds by Piraeus Bank.