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UPDATE 1-EBRD buys slice of National Bank of Greece covered bond
October 19, 2017 / 1:34 PM / a month ago

UPDATE 1-EBRD buys slice of National Bank of Greece covered bond

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By Marc Jones and Abhinav Ramnarayan

LONDON, Oct 19 (Reuters) - The European Bank for Reconstruction and Development said on Thursday it had invested in the first publicly sold covered bond issued by a Greek bank since the government in Athens returned to international bond markets this year.

The development bank said it bought 30 million euros of the 750 million euros offering by the National Bank of Greece .

NBG’s covered bonds -- debt backed by collateral such as mortgages -- is the first debt sold publicly by a Greek bank since the sovereign made a high-profile return to bond markets in July.

“This (NBG transaction) sends a strong signal to foreign and domestic investors that after many tough years the outlook for Greece has changed remarkably for the better,” EBRD official Lucyna Stańczak-Wuczyńska said in a note.

“The high demand shows us that appetite has returned, and this is good news for Greece and a reward for some painful adjustments.”

Greece was locked out of bond markets for three years as doubts grew over its ability to meet its debt obligations, as international creditors withheld aid on grounds the country was not implementing reforms adequately.

In June, euro zone governments threw Greece a credit lifeline worth $9.5 billion and sketched new detail on possible debt relief as the IMF finally offered to help out after two years of hesitation.

The country, which is on its third international bailout, returned to bond markets in July, a deal that was widely expected to be replicated by Greek banks and corporates.

Following NBG, Greek lender Eurobank is also in talks with investors with a view to selling covered bonds.

Last month, the EBRD agreed to join the European Investment Bank and the European Investment Fund in backing a 700 million private placement of covered bonds by Piraeus Bank. (Reporting by Marc Jones and Abhinav Ramnarayan; editing by John Stonestreet)

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