The demand for the green bonds that Piraeus Bank is trying to place on the markets today is high, as just two hours after the opening of the bid book, the placements by interested investors have exceeded 750 million euros, exceeding the requested amount. issue by 1.5 times.
Piraeus Bank entered the markets to raise € 500 million through bonds as part of its program to strengthen overall capital adequacy ratios.
This is a green bond of the senior preferred category, lasting six years, which will strengthen the overall capital adequacy ratio of the systemic group.
This issue will help create a yield curve for the bank’s securities and is another step in meeting the Minimum Equity and Eligible Liabilities (MREL).
The bond rate is estimated to be around 4%, however the final return will depend on the demand in the coming hours by investors.
The use of funds
Due to the green nature of the issue, the money raised will fund companies that meet specific criteria, based on the footprint of their activity and investments in the environment. A similar bond was issued in 2020 by the National Bank.
It is recalled that earlier in the year Piraeus Bank successfully completed a capital increase of 1.4 billion euros, as well as the distribution of AT1 securities, amounting to 600 million euros, in order to strengthen its capital adequacy.
If the current version succeeds, the bank will have raised a total of 2.50 billion euros in 2021, an amount that exceeds the planning for this year.
In the coming years, the issuance of alternative securities, especially green securities, under the rules of responsible banking (ESG), will be continuous.
The goal is, based on the MREL directives, to strengthen the indicators of total capital adequacy to be at the level of 26% by 2025.
Achieving it will pave the way for the integration of Greek banks in the emerging banking union in Europe.
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