Alpha Bank: What the investment interest in the bank’s senior preferred bond shows

The issue of Alpha Bank‘s senior preferred bond attracted a lot of investment interest, with the Bank finally raising 450 million euros from the markets, significantly exceeding the initial target of 300 million euros.

The new bond has a maturity of 4.5 years and is callable in 3.5 years, with a coupon of 7.50% and a yield of 7.75%, lower than the benchmark yield set at the start of the process.

The issue gathered the interest of more than 100 investors with its main parts covered by 42% by institutional investors and supranational organizations, 45% by fund managers and 13% by wealth management. 2/3 of the issue was placed outside of Greece, proving in practice the interest of foreign investors in the prospects of the Bank and the country.

The Bank, taking advantage of the positive momentum prevailing in the markets at the present time, decided to cover in advance part of its future needs in MREL funds, thus achieving the goal it had set earlier.

The current issue comes just a month and a half after the raising of 400 million euros through the issuance of a 3-year senior preferred bond with the possibility of recall in two years.

At the same time, the Bank proceeded with a proposal for the early repayment of an existing senior preferred bond (issued in Dec. 2021 with an expiration in Feb. 2024 and with the possibility of revocation in Feb. 2023).

The proposal was made in the context of active management of the Bank’s debt profile and on a voluntary basis, additionally allowing investors to transfer their position to the new issue.

Confidence in the bank’s prospects

The majority acceptance of the proposal in the part of the exchange by the investors, who preferred to renew their investment in the Bank in the medium term, confirms the confidence in its prospects.

As stated in a related announcement, Alpha Bank is the first European bank to receive approval from the supervisory mechanism for the early repayment of funds falling within the supervisory requirements (MREL), which seals the adequate and lasting coverage of its supervisory obligations under the in light of strict specifications set in the relevant context.

With the new issue, Alpha Bank Group confirms the confidence of the markets in its Strategic Plan, additionally shields its capital base and long-term liquidity and responds, ahead of schedule, to the implementation of the supervisory requirements (MREL) of January 1, 2026 .

According to Alpha Bank, the increased demand manifested in yesterday’s double transaction confirms the Bank’s strong position in the capital markets, as a result of its strengthened size fundamentals and the improvement in the quality of its profitability, which is also confirmed by its overall presence in debt markets in the last three years, through bond issues totaling 2.8 billion

BNP Paribas, Deutsche Bank, Goldman Sachs and Morgan Stanley acted as joint bookrunners.