The European Investment Bank (EIB) and the National Bank of Greece (NBG) have signed a financing agreement guaranteed under the Investment Plan for Europe (also known as the “Juncker Plan”), to channel an amount of up to EUR 200 million to small and medium-sized enterprises (“SMEs”) and medium-sized companies (“Mid-Caps”) in Greece. The financing is provided through a private placement of covered bonds issued by the NBG with the European Investment Bank.
On the 30th of July, the NBG has issued EUR 200 m of new 5-year fixed rate covered bonds with an annual coupon of 1.85% under its EUR 15 billion Covered Bond Programme II. The covered bonds are rated BBB- by S&P, BB- by Fitch and Ba2 by Moody’s. The EIB will initially purchase EUR 100 m, while the remaining EUR 100m will be retained by NBG.
The EIB and NBG have agreed that the European Investment Bank may purchase the remaining EUR 100 m of covered bonds that will be retained by NBG in the next 6 months, providing an additional financing of EUR 100 m.
The transaction contributes to the EIB’s stated goal of supporting SMEs and Midcaps in Greece whilst also having a signalling and mobilisation effect, helping the issuer to diversify its sources and reduce the cost of its liabilities.