Bur­den-shar­ing.

Kathimerini English - - Focus -

Al­pha Bank and Eurobank be­came the lat­est Greek lenders to launch liability man­age­ment ex­er­cises this week as they scram­ble to fill cap­i­tal holes. The two have joined Pi­raeus Bank, which be­gan a sim­i­lar ex­er­cise in the mid­dle of Oc­to­ber, in the hope that they will sub­se­quently be in a good po­si­tion to raise cap­i­tal pri­vately. And just like with Pi­raeus, se­nior bond­hold­ers in both banks will po­ten­tially play a big part in plug­ging any cap­i­tal short­fall. “It gives a glimpse into the fu­ture and how bur­den-shar­ing will work in Europe,” said a banker yes­ter­day. “It is the first time to my knowl­edge that we will see se­nior [bonds] play such a big part in re­cap­i­tal­iz­ing banks.” Al­pha is look­ing to ex­change 27 sub­or­di­nated and se­nior bonds – orig­i­nally amount­ing to 2.79 bil­lion, of which 1.08 bil­lion re­mains out­stand­ing – for so-called non-trans­fer­able re­ceipts. Eurobank is tar­get­ing 20 sub­or­di­nated and se­nior se­cu­ri­ties orig­i­nally amount­ing to around 2.71 bil­lion-equiv­a­lent and with some 877 mil­lion now out­stand­ing. “The reg­u­la­tory back­drop for all th­ese of­fer­ings is the same: If the banks re­quire state aid, there will be manda­tory bur­den­shar­ing on the debt and eq­uity,” the banker said.

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