Greece sets terms for bank recapitalization

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

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)