Greece's Alpha Bank sells bulk of new shares to U.S., British investors

Fri Mar 28, 2014 8:43am EDT

Related Topics

* Alpha Bank, Piraeus shareholders approve share offerings

* The two banks raised a combined 2.95 bln euros

ATHENS, March 28 (Reuters) - U.S. and British investors bought the bulk of Alpha Bank's 1.2 billion euro ($1.65 billion) new share issue, it said on Friday, providing further evidence that foreign investors are warming to Greece.

Alpha, Greece's fourth-largest lender, issued new shares to buy back 940 million euros of preferred shares from the government and cover a 262-million euro capital shortfall revealed in a stress test by the central bank earlier this month.

"The 1.2 billion euros that was raised is an important vote of confidence," the bank's Chief Financial Officer Vassilis Psaltis told shareholders on Friday, adding that 42 percent was placed with British investors and 45 percent with U.S. funds.

The country's second-largest lender Piraeus Bank also completed a 1.75 billion euro ($2.40 billion) share offering earlier this week.

"The response of international investors exceeded expectations and signals confidence that the Greek economy will soon enter a growth path," Piraeus's Chairman Michael Sallas told journalists.

Piraeus will offer 10 percent of the share issue to local investors next week at 1.70 euros a share.

The country's bank rescue fund HFSF welcomed the successful completion of the share issues.

"The capital raised by private investors further strengthens the capital adequacy of the banks, significantly contributing to the stability of the financial system, and highlights the dynamic return to international capital markets," the fund's CEO Anastasia Sakellariou said.

Greece's bailed-out government is also readying to return to bond markets after four years of exclusion.

Greek banks started to tap markets before an expected wave of fund-raising by European peers, in a bid to boost their capital position ahead of the European Central Bank's health check by November, when it becomes their supervisor.

"Conditions were favourable to raise funds from high-quality investors with a long-term outlook," Psaltis said.

HFSF, Alpha's biggest shareholder, will see its 82 percent stake in the bank reduced to 70 percent as it did not take part in the capital raising, which will boost the bank's Core Tier 1 capital adequacy ratio to 16.6 percent.

The new shares will start trading on April 4.

Proceeds from Piraeus's equity offering will plug a 425 million euro capital shortfall and pay back 750 million euros of preferred shares owned by the state, bringing its Core Tier 1 capital ratio to 16.8 percent. The HFSF's stake in Piraeus will fall to 67 percent from 81 percent.

($1 = 0.7278 Euros) (Reporting by George Georgiopoulos and Lefteris Papadimas; Editing by Elaine Hardcastle)

FILED UNDER: