39419 - DCM - PROGRAM FOR COVERED BONDS OF GREEK BANKS

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Summary of Investment Information

Project Number

39419

Company Name

NATIONAL BANK OF GREECE S.A.

Date SPI Disclosed

Oct 20, 2017

Country

Greece

Region

Europe

Projected Board Date

Sep 29, 2017

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Oct 5, 2017
Signed : Oct 10, 2017
Invested : Oct 19, 2017

Sector

Commercial Banking - Housing Finance

Project Description

The project involves an investment of up to US$75 million in euro-denominated mortgage covered bonds issued by National Bank of Greece S.A. (“NBG”). The bonds will be issued on the Luxemburg Stock Exchange through a public book building process. Total expected issuance amount is EUR500 to EUR750 million, and the bonds will have a three year bullet repayment maturity.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant, expected project level impact is derived from improved liquidity and balance sheet stabilization which would benefit the customers of the banks who are severely affected by the banking crisis. In addition, IFC's funding will be used for onlending to mortgage borrowers, who have been facing a liquidity squeeze, as cash starved banks deleverage their portfolios. Beyond the project, the main source of expected market impact is derived from supporting recovery from the crisis and building resilience through re-establishment of sustainable sources of funding on the market from international capital markets, and promoting greater integration of capital markets, both brought about by market enabling and demonstration effect.

Greek lenders are facing a severe and prolonged lack of access to international financial markets. The proposed project, involving well-structured, highly secured covered bond issuance to one of Greek's four systemic banks, will provide an ideal platform for regaining market confidence and accessing international markets during times of severe financial crisis. IFC will provide the Bank with funding of three-year maturity, which is currently unavailable on the market, thus improving the bank's balance sheet structure. In addition, IFC's unique role, along with several other participating IFI investors, is to showcase confidence in the Greek lender and proposed transaction, thereby improving market perception and increasing the likelihood of a successful bond issuance.

E&S Category Rationale / Risks and Mitigation

The proposed Project is an investment of up to US$75 million equivalent in EUR-denominated Mortgage Covered Bonds ('CB') issued by National Bank of Greece SA ('NBG'). The proceeds of IFC's investment will be earmarked only for mortgage finance for residential home buyers in Greece. The project has been classified as a Category FI-3 according to IFC's Environmental and Social Review Procedure, since mortgages have low E&S risks by nature. As part of a previous equity investment, NBG had established an Environmental and Social Management System, applicable to the entire portfolio of the Bank and relevant subsidiaries. The implementation had not fully started before selling of the shares. The Bank is generally in compliance with IFC's PS2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

National Bank of Greece
Apostolos Mantzaris
Treasury
0030 210 3328 517
MANTZARIS.AP@nbg.gr
n/a
WWW.NBG.GR

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