National bond issue already covered
During a roadshow in London, National Bank officials have observed particularly strong investor interest in the lender’s 750-million-euro bond issue and the planned share capital increase of 2.5 billion euros.
The book for the NBG bond will open on Thursday morning and close in the afternoon, with sources telling Kathimerini that the offers from foreign investors have already covered supply. The bond is independent from the share capital increase and is meant to draw liquidity for the bank.
NBG may now enjoy a great degree of liquidity, but its management has decided in favor of a bond issue in order to make the most of the favorable international conjuncture and expand its funding sources.
Investor interest in the new bond issue, which matures after five years, is high and the interest rate is likely to be some 50 basis points below that of the Greek bonds issued earlier this month (4.95 percent) – i.e. below 4.50 percent.
The 2.5-billion-euro share capital increase will effectively be concluded on Saturday, May 10. The book will close in the afternoon of May 9 having opened either on the same morning or the day before. The level of demand will determine the price of sale to investors, and the NBG general assembly of shareholders on the following day will approve the sale price of the new shares according to the book of offers. The new shares will start trading on the local bourse by the end of next month.
Beyond the capital increase and the bond issue, National is also expecting to obtain some 1.04 billion euros through its action plan submitted to and approved by the Bank of Greece. These funds will not only cover the capital requirements of 2.183 billion euros identified by the recent stress tests, but will also allow National to submit an application for the repayment of the preferred shares acquired by the Hellenic Financial Stability Fund through the recapitalization process, worth 1.35 billion euros.
Goldman Sachs International and Morgan Stanley will be the international coordinators and joint managers of the book to be opened.