January 21, 2020 / 11:21 AM / a month ago

NBG swaps Greek govt bonds with new 30-year bond issue

ATHENS, Jan 21 (Reuters) - National Bank (NBG), Greece’s second-largest lender, swapped government bonds worth about 3.8 billion euros ($4.22 billion) with a new 30-year government bond, the finance ministry said on Tuesday, yielding a capital gain for the bank.

The swap reduces the government’s refinancing risk as bonds maturing in 5.4 years were exchanged for a new issue maturing in 2050. “The exchange helps to further improve the sustainability of public debt, both in terms of debt-to-GDP as well as annual gross funding needs as a percentage of GDP,” the ministry said.

The three government bonds NBG swapped for new government paper of equal value had an average coupon of 3.5%. They were exchanged for 30-year government paper paying a coupon of 3.25%.

The swap will boost NBG’s profitability this year, helping the bank to cover capital needs and take part in the ‘Hercules’ bad loan reduction scheme, the ministry said. ($1 = 0.9007 euros) (Reporting by George Georgiopoulos Editing by Mark Heinrich)

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