ATHENS Greece's Piraeus Bank (BOPr.AT) will raise more than 19.5 percent of the funds it needs to plug a 7.33 billion euro capital hole from private investors in a rights offering that ends later on Tuesday, a senior bank official told Reuters.
Piraeus is the third major Greek lender, after Alpha (ACBr.AT) and National Bank (NBGr.AT), to raise at least 10 percent of its common equity issue from private investors, a requirement under a recapitalization program for banks to stay privately run.
"Private sector take-up will be more than 19.5 percent, near 20 percent," said a senior banker at Piraeus who declined to be named. Meeting the minimum threshold means Piraeus will not need to resort to issuing costly contingent convertible bonds, or CoCos.
Greece's four biggest banks, including Piraeus, need 27.5 billion euros ($36.01 billion) to repair their solvency after losses on sovereign debt writedowns and bad loans.
Their aim is to regain access to capital markets, to help fund the economy out of its deep six-year recession.
Under a recapitalization scheme, Athens agreed with its international lenders, at least 10 percent of new equity issues by its four big banks must be bought by the market for them to stay privately run.
The rest of the capital will be pumped in by the HFSF in exchange for shares.
Piraeus Bank's 35.6-for-1 rights offering at 1.7 euros a share to raise up to 6.94 billion euros and plug a 7.33 billion euro capital hole, ended on Tuesday. The bank's plan included raising another 400 million via a private share placement.
Peers Alpha Bank (ACBr.AT) and National Bank (NBGr.AT) have met the required threshold, retaining management control. Eurobank EFGr.AT has opted to be fully recapitalized by the rescue fund.
(Reporting by George Georgiopoulos; Editing by Dan Grebler)