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Eurobank Eyes New Bond of as Much as 500 Million Euros, CEO Says


Eurobank Ergasias SA may issue new bonds in 2018 and is also crafting a new plan to reduce its exposure to bad loans for the period after 2019, according to Bloomberg.

The Athens-based lender issued a covered bond in 2017, its first return to debt capital markets since 2014. “We’re considering issuance of another covered or senior bond during the course of 2018,” Fokion Karavias, the bank’s chief executive officer said in an interview to Bloomberg in Athens.

A new issue could be as much as 500 million euros ($580.9 million), but “given that we aren’t in a rush, we will consider all available options before taking our final decision,” Karavias said. Any move is subject to market conditions which have become challenging due to external factors, he added.

The toughest job for Greek banks at the moment is to reduce the size of their bad loans. “It’s our responsibility to show to the market in a convincing way how from the projected 2019 levels we can move lower to a mid-teens non-performing exposure ratio in the following years.” To achieve that, the lender “is planning to present such a plan within the next twelve months,” he said.

Eurobank issued a 950 million-euros Tier 2 bond in 2017 and is now considering “the possibility of gradually replacing the outstanding one with an issue placed in the market,” by issuing a new Tier 2 bond of 250 million euros, again without any rush, Karavias said.

In 2017 Eurobank sold 1.5 billion euros of unsecured loans and “we plan to sell another such portfolio this year in a transaction which should also be capital neutral,” Karavias said. The lender is finalizing all the details for this sale and “over the next few months, we should be able to update the market about a transaction related to secured NPEs,” he added.

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