Piraeus aims to be first in line for capital
LONDON (Reuters) – Piraeus Bank’s liability management exercise launched this week should ensure it is first in the queue of Greek institutions raising capital once stress tests are completed this month. Senior debt holders will play a key part in the recapitalization. The bank on Thursday announced an exchange offer on 1.1 billion euros of its subordinated and senior bonds, of which a total 592 million remains outstanding. Investors will have the option of exchanging their holdings for either cash or shares. “It’s likely that all the Greek banks will need some capital but there will only be a limited pool of money. Piraeus is keen to capture as much of that pool as possible by being ready ahead of the stress tests results,” said a banker familiar with the deal. In the first step of the offer, holders of the 2017 senior, 2016 subordinated and perpetual hybrid will have to decide if they will accept so-called non-transferable receipts (NTR). Piraeus is running a consent solicitation alongside the offer which is structured in a way so that recalcitrant holders will participate. “The consent takes time and investors need notice so by doing it that way, everything will be ready for when Piraeus publishes the equity prospectus, as and when that is,” another banker close to the situation said.