Piraeus Bank Successfully Priced a €500mn Green Bond at the Tightest Senior Preferred Bond Spread Ever
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senior preferred bondfinancial
A senior preferred bond is a debt security that gives its holders a higher claim on a company’s cash and assets than many other creditors, so they are paid before lower-ranking debt if the company runs into trouble. For investors this usually means more safety and lower returns compared with lower-priority bonds—think of it as standing earlier in line at a bakery, which reduces the risk of coming away empty-handed but also yields a smaller share of the profits.
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An investment grade rating is a score assigned by a credit-rating agency indicating that a bond issuer or debt is considered reasonably safe and likely to repay its obligations. Investors treat it like a safety label—similar to a product receiving a good quality seal—because higher ratings mean lower risk of default, usually lower borrowing costs for the issuer, and greater appeal to conservative investors and large funds.
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Minimum Requirement for own funds and Eligible Liabilities (MREL) is a regulatory standard that forces banks to hold a buffer of capital and debt that can absorb losses or be written down if the bank fails. Think of it like a combined savings account and emergency loan line that regulators require so creditors and investors, rather than taxpayers, bear the cost when a bank gets into trouble. For investors, MREL influences how risky a bank’s bonds and shares appear and can affect debt pricing, recovery prospects in a failure, and the bank’s capacity to lend or return capital.
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ESG stands for Environmental, Social, and Governance, which are key factors investors consider when evaluating how sustainable and responsible a company is. It involves assessing how a company manages its impact on the environment, treats its employees and communities, and operates transparently and ethically. Investors use ESG criteria to identify businesses that align with their values and have the potential for long-term success.
mid-swap ratefinancial
The mid-swap rate is the midpoint between the rates at which buyers and sellers are willing to fix interest payments in an interest-rate swap, effectively the market’s neutral fixed rate for exchanging variable and fixed cash flows. Investors use it as a common benchmark to value loans with changing interest, price interest-rate contracts and gauge market expectations about future rates—like using the average of store prices to judge a fair market price.
re-offer pricefinancial
The re-offer price is the final public sale price for newly issued securities set by the lead bank handling the offering; it is the price at which those shares or bonds are sold to investors after the deal is negotiated. It matters because it determines what investors pay, affects whether buyers see an immediate gain or loss, and fixes how much money the issuer raises—like the retail tag a store puts on a batch of goods it just bought from a wholesaler, it shows the market value investors must pay at launch.
ATHENS, Greece--(BUSINESS WIRE)--
Piraeus Financial Holdings S.A. announces that its subsidiary, Piraeus Bank S.A. (“Piraeus” or the “Bank”), has successfully completed the pricing of a new €500 million Green Senior Preferred Bond (the “Bond”) with a coupon of 3.375%, attracting the interest of a large number of institutional investors.
The Bond has a maturity of 6 years and an embedded issuer call option after 5 years. Settlement will take place on 2 December 2025 and the notes will be listed on the Luxembourg Stock Exchange’s Euro MTF market. The Bond is expected to be assigned an investment grade rating of “Baa2” from Moody’s Ratings.
The net proceeds of the issuance will be directed towards the financing and/or the refinancing of eligible green assets, as described in the Piraeus’ Green Bond Framework, providing a positive environmental impact. Additionally, the Bond will further support Piraeus’ MREL position.
The issuance takes place following the recent Piraeus’ ESG rating upgrade by MSCI to ‘AAA’, which is the highest rating available. This upgrade positions the Bank as the only Greek company with a ‘AAA’ ESG rating by MSCI, and as one of the leaders in sustainability in the financial industry at an international scale.
Piraeus is the only Greek Bank to have issued four green bonds to date, with a total of €2.15bn outstanding. This is a further testament to the Bank’s strong commitment in sustainability, with circa €0.8bn of the net proceeds of the Piraeus outstanding green bonds already allocated to eligible green assets.
The new Piraeus Green Bond has attracted significant interest from more than 120 institutional investors, with 66% placed among asset managers, 29% to banks and private banks, and 5% to other investors. More than 80% has been allocated to international institutional investors, with demand stemming mainly from France (27%), UK (23%), and Italy (10%). It is highlighted that the majority of the notes has been allocated to ESG investors.
The success of the transaction is a clear testament of investor confidence in Piraeus Bank. The total order book of the transaction peaked at more than €2.0bn, being more than 4.0x oversubscribed compared to the issuance target of €500mn, which allowed the Bank to achieve the tightest credit spread for any senior preferred bond it has ever issued; 98bps over the corresponding mid-swap rate, compared to an initial guidance of 125bps. The final coupon has been set at 3.375%, with a re-offer price of 99.995%.
Barclays Bank Ireland PLC, BofA Securities, Commerzbank, Credit Agricole CIB, Deutsche Bank and IMI-Intesa Sanpaolo acted as joint bookrunners of the issue. Allen & Overy and Bernitsas Law Firm acted as legal advisors to Piraeus.
