After a series of successful bond issues at the level of its Group Alpha Bank in the last three years for a total amount of 3.55 billion euros, Alpha Bank has successfully raised 300 million euros from the markets through the issuance of an Additional Tier 1 bond, garnering strong interest from the investment community.

As announced, capitalizing on the positive momentum in the markets, high demand for the AT1 bond reached €2.9 billion, resulting in a 9.5 times overrun of the original target, with bids coming from more than 250 investors.

This is an important milestone that confirms the Group’s strong position and ability to leverage the capital markets as well as the determination of its management team to move quickly, taking advantage of favorable market conditions, in order to further strengthen its capital position. The issue also creates the conditions for optimizing the capital structure of the Group, according to the standards of leading European banks. The new bond, of indefinite duration with the possibility of revocation in 6 years, will be listed for trading on the Luxembourg Stock Exchange.

The yield stood at 7.5%, reflecting the significant narrowing of the spread compared to the first AT1 issue, which took place in February 2023 with a yield of 11.875%. The transaction attracted interest from international investors, with coverage primarily from the UK (46%), the EU (43%), Switzerland (4%) and Asia (3%).

Long-term investors led the allocation, with core buyers of AT1 securities accounting for around 60% of the allocation.

The Deputy CEO of Alpha Bank Group, Lazaros Papagarifallou, noted: “The high demand attracted by the Bank’s new AT1 transaction, with the coupon shaping up better than the initial market estimates, is a significant success for our bank and proof the confidence of the investment community. This confidence comes as a result of our bank’s recent upgrade to investment grade by Moody’s and the repeated achievement of strong levels of organic profitability and capital formation. The new issue not only optimizes and strengthens our already solid capital position by 93 basis points by diversifying our capital sources, but also reflects our commitment to strengthen our capital reserves, providing further flexibility to return greater value to shareholders.”

Strong vote of confidence in Alpha Bank’s prospects

It is indicative that:

• Within just 2 hours of the opening of the books, the bids reached almost 2.5 billion euros, exceeding, in the end, by almost 10 times the requested amount of 300 million euros.

• The yield of the issue was set at 7.5% and was the lowest recorded in an AT1 issue between Greek and Cypriot banks, achieving significant convergence with the yield of corresponding issues of much larger European banks.

• Alpha Bank derives multiple benefits from the success of this issue:

– Establishes itself as a leader in the choice of bond investors, covering first and by a distance the target for MREL almost 1.5 years earlier.

– Strengthens its “arsenal” and, in practice, ensures the expanded dividend distribution that has been announced, amounting to 35% of profits for this year and 50% of profits for 2025.

– It further improves its position to benefit from new upgrades from credit rating agencies. As subprime bonds are the closest thing in the hierarchy to stocks, such good pricing highlights the opportunities that exist for investors.