ATHENS National Bank of Greece (NBG) (NBGr.AT) was set to be the fourth Greek lender to tap international markets through a share offering on Wednesday after plans were approved for it to raise up to 2.5 billion euros ($3.5 billion) to boost its core capital.
The country's largest bank by assets got the go-ahead from bank bailout fund and 84 percent shareholder HFSF to seize a window of opportunity to raise funds as foreign investors warm to the debt-laden country's recovery prospects.
The bank has picked Goldman Sachs (GS.N) and Morgan Stanley (MS.N) as global coordinators for the issue, which will be offered to foreign institutional investors via a book-building next month.
NBG must plug a 2.18 billion-euro ($3 billion) capital hole, a central bank stress test revealed in March.
The bank, with subsidiaries in the Balkans and Turkey, had previously resolved not to resort to the financial markets to fill the gap but focus on selling non-core assets instead.
But it changed tack last week after pressure by the central bank to follow the example of its peers Alpha Bank (ACBr.AT) and Piraeus (BOPr.AT), which have already raised 2.95 billion euros between them from markets.
Eurobank (EURBr.AT), the country's third-largest lender, is also tapping markets for 2.86 billion euros and has already secured commitments to the offer by a Canadian-led investor group for 1.3 billion euros.
NBG's equity offering will not include pre-emption rights for existing shareholders, including the HFSF, as was the case with share offerings by its peers.
NBG's board, which on Wednesday set a shareholders meeting for May 10 to get formal approval for the offer, said the funds will also help it pay back 1.35 billion euros worth of preferred shares held by the Greek state.
"The proposed share offering will boost significantly the bank's capital adequacy ratios, allowing it to continue to support the country's economy," NBG's chief executive Alexandros Tourkolias said.
NBG, with a current market value of 7.3 billion euros ($10.1 billion), said the targeted proceeds will bring its Core Tier 1 capital ratio to 18.2 percent of risk-adjusted assets. It said it expects to conclude the placing by the end of May.
National Bank also plans to issue about 750 million euros of senior debt, a senior NBG executive told Reuters. "It will be officially announced in the coming days", said the official, who asked not to be named.
(Reporting by George Georgiopoulos; Editing by Harry Papachristou and Greg Mahlich)