Thursday, 12 November 2015 17:59
ATHENS: National Bank of Greece (NBG) , the country’s biggest lender by assets, has started book building for a share issue designed to raise 1.6 billion euros to plug a capital shortfall, it said on Thursday.
The bank was found to have a capital shortfall of 4.6 billion euros ($ 4.9 billion) under the “adverse” scenario in the European Central Bank’s stress test and a gap of 1.576 billion under the test’s baseline scenario.
NBG said the offering to international investors would raise at least 600 million euros and it was aiming for a total of 1.6 billion, or possibly more.
Apart from book-building to attract foreign institutional investors, NBG will also offer shares to investors in Greece to raise up to 160 million euros, without any underwriting.
This offer will be sold at the same price as the international one. Goldman Sachs and Morgan Stanley are the joint global coordinators and joint bookrunners of the book-building.
Commerzbank, Keefe, Bruyette & Woods, NBG Securities and Nomura International are also joint bookrunners with BNP Paribas and HSBC co-bookrunners.
If the size of the international offer is increased, the size of the domestic sale will not exceed 10 percent of the international placement, NBG said.
NBG’s offer to bondholders to swap junior and senior debt for new shares ended on Wednesday and will generate capital of 691 million euros to help fill the shortfall.
The bank, 57.2 percent owned by Greece’s HFSF bank rescue fund, also plans to sell its Turkish subsidiary Finansbank as part of its moves to plug the capital hole.
If NBG reverts to the HFSF (Hellenic Financial Stability Fund) to fill any capital need under the ECB’s adverse scenario that could not be covered by private funds, it would be done by issuing a mix of contingent convertible bonds (CoCos) and new shares at a ratio of 75 percent CoCos and 25 percent equity.
