Attica Bank confirms collateral bond issue

Attica Bank will issue government-guaranteed bonds that can serve as collateral to borrow funds from the Greek central bank’s emergency liquidity facility (ELA), its deputy chief executive confirmed to Reuters on Thursday.

The bank, majority-owned by the Engineers and Public Contractors Pension Fund (TSMEDE), suffered deposit outflows in the last month after the Bank of Greece asked it to freeze lending and address corporate governance issues.

“We will issue 380 million euros of such bonds to have a comfortable collateral cushion for tapping the central bank’s ELA window,” deputy CEO Thanasis Tsadaris told Reuters.

All Greek lenders have made use of such bonds under a liquidity support scheme enacted in 2008 in the wake of the global credit crisis after the Lehman Brothers collapse.

“It’s a proactive move. Like other Greek banks, we had issued about 1 billion euros of such bonds since 2009 but retired them all in July this year as we had ample collateral,” Tsadaris said.

[Reuters]