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Dublin: 18 °C Wednesday 30 July, 2014

A Greek bank is to issue bonds for the first time since 2009

Piraeus Bank SA requires more than €6 billion worth of capital.

A Greek euro coin.
A Greek euro coin.
Image: dullhunk via Flickr/Creative Commmons

THE GREEK BANK Piraeus Bank SA’s is planning to issue bonds in the first public debt sale from a Greek lender since 2009 when the country experienced a financial crisis, according to financial services company UBS AG.

The nation’s banks need to boost capital by €6.38 billion after six years of recession left them with swelling bad loans, the central bank said yesterday.

Piraeus, which has a shortfall of €425 million, is issuing debt before the Greek government returns to capital markets after its bailout, UBS said in a note to clients today.

Record lows

Borrowing costs for banks in Europe’s most indebted nations dropped to a record this week as euro-area services growth accelerated and benchmark interest rates were held at record lows.

Government bond yields from Greece to here in Ireland sank to the least since at least 2010 as the recovery from the sovereign-debt crisis gained momentum.

Debt investors

The country’s second-largest lender is meeting debt investors next week after hiring five banks to advise on a deal.

The issue will total about €500 million, the Greek newswire ANA reported yesterday, without saying where it got the information.

The average yield on financial corporate bonds from countries including Greece, Italy, Spain, Ireland and Portugal dropped to an all-time low of 2.27 percent this week, according to a Bank of America index.

-  © Bloomberg

Ireland: Our post-bailout return to the bond markets raised €3.75 bn >

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