Greece sets terms for bank recapitalization

ATHENS Mon Nov 12, 2012 9:15am EST

A boy plays an accordion outside of an Emporiki bank branch in central Athens September 21, 2012. REUTERS/John Kolesidis

A boy plays an accordion outside of an Emporiki bank branch in central Athens September 21, 2012.

Credit: Reuters/John Kolesidis

ATHENS (Reuters) - Greek banks will recapitalize themselves by issuing shares and convertible bonds and must meet a core Tier 1 capital adequacy ratio of at least 6 percent, the government decided on Monday.

The shares will be offered at a 50 percent discount from the average price over the 50 days prior to the issue, the government said in a cabinet decision.

The bonds will pay a 7 percent annual coupon with a half-a-percentage-point step up per year. They will be converted to shares after five years, the government said.

(Reporting by Lefteris Papadimas; writing by Michael Winfrey)

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