Hellenic Bank successfully completed a €100 million Senior Preferred bond issuance under its €1.5 billion Euro Medium-Term Note (EMTN) programme, according to an announcement released on Wednesday by the bank.
The bond was issued after meeting the customary conditions, with the total order book exceeding €370 million, representing a 3.7-fold oversubscription.
The bond will be issued at par with a fixed annual interest rate of 4 per cent, payable annually in arrears.
The fixed rate will be reset on September 17, 2025, with the bond maturing on September 17, 2026.
However, there is an option to call the bond at par on September 17, 2025, subject to meeting certain conditions and applicable prudential supervision rules.
Settlement is expected on September 17, 2024, and the bond will be listed on the Euro MTF market of the Luxembourg Stock Exchange.
The strong investor interest allowed the bank to lower the initial indicative pricing from 4.5 per cent by 50 basis points.
The bond is expected to meet the Minimum Requirement for own funds and Eligible Liabilities (MREL) criteria by the September 17, 2025 call date, aligning with the bank’s funding strategy.
The bond is expected to receive ratings of ‘Ba2’ from Moody’s and ‘BBB-’ from Fitch.
“We are pleased with the success of this transaction, which is a clear demonstration of the market’s confidence in the bank’s creditworthiness, reflected in the significant investor interest and competitive pricing,” Hellenic Bank interim CEO Antonis Rouvas said.
He added that the transaction follows the recent upgrades of the bank’s ratings, which were the result of several significant milestones achieved by the bank and the further improvement of its business model and financial performance.
“The substantial reduction in the credit margin compared to the first Senior Preferred bond issuance in July 2022 reflects the bank’s strengthened credit profile,” the interim CEO said.
“I recognise and thank all my colleagues at the bank and the Board of Directors for their hard work and dedication on this journey,” Rouvas added.
Finally, it should be noted that J.P. Morgan acted as the sole lead manager for the transaction.
