National Bank covered bond issue proves great success

The covered bond issue by the National Bank of Greece was completed on Tuesday, becoming the first Greek lender to tap the market since 2014 and securing the amount of 750 million euros at a rate of just 2.9 percent, far below the original estimate for 3.25 percent.

As many as 110 investors took part in the issue, offering the bank 2 billion euros. The bond was oversubscribed almost 2.7 times. Kathimerini understands that almost half of the investors were from the UK (45 percent), another 15 percent were from Germany, Austria and Switzerland, 15 percent from Italy and 14 percent from Greece.

It is the first time since 2009 that National has issued a covered bond, marking the bank’s return to international money markets. The issue is part of the lender’s efforts to regain its independence from the Bank of Greece’s emergency liquidity assistance (ELA) mechanism. NBG officials estimate that, following the successful bond issue, the bank will now be able to pay off all of its dues to the ELA mechanism by the end of the year.

Sector officials add that the success of the issue opens the way for other banks to return to the markets.