Piraeus Bank will fund investment projects worth 700 million euros by Greek SMEs after the signing of an funding agreement with European Investment Bank (EIB), European Investment Fund and European Bank for Reconstruction and Development (EBRD) on Friday.
The agreement envisages the issuing of a covered bond by Piraeus Bank, signalling the first investment by international financial organizations on a covered bond issue by a Greek bank since the start of the economic crisis. Piraeus Bank will issue a new five-year covered bond loan worth 500 million euros in October, part of the bank’s covered bonds program worth 10 billion euros.
EIB will cover 350 million euros of the issue, while European Investment Fund will cover another 50 million offering long-term funding to Piraeus Bank’s customers. The covered bond issue will be offered, initially, to international organizations such as EIB, EIF and EBRD, while Credit Suisse will act as coordinator of the transaction.
The new issue is an innovative funding tool. The money to be raised by Piraeus Bank will be distributed to Greek SMEs.
EIB’s president Werner Hoyer, in comments made to AMNA said that EIB is expected to sign funding agreements worth a record 2.0 billion euros with Greece this year.
Christos Megalou, the bank’s CEO, said Piraeus Bank has a strategic commitment to play a leading role in the restart and growth of the Greek economy, supporting Greek private business activity. The bank focuses particularly in small and medium-sized enterprises, the backbone of the Greek economy. “Piraeus Bank has the ability and means to exploit all available modern funding tools to the benefit of its customers in order to support business activity in overcoming the consequences of recession, to develop and to become a driving force for development and employment again.
Speaking during a signing ceremony held at Piraeus Bank’s main offices, EIB’s president said: “It is the biggest support offered by EIB to SMEs in Greece. This record transaction is proof of increased support to Greek enterprises that want to expand activities. With the support of the Investment Plan for Europe (Juncker Plan), enterprises with activities in tourism, manufacturing and services will be able to move forward. This new initiative for SMEs follows a program worth 1.0 billion euros announced last year in cooperation with Piraeus Bank and other large Greek banks”.
EU Commissioner Pierre Moscovici, in comments made in Brussels, said: “Today’s agremenet with Piraeus Bank under the auspices of the Juncker Plan means that 700 million euros of new funding is now available to Greek SMEs. This will give a tremendous boost to the economy and proves the European Commission’s steady commitment to support growth and economic progress in Greece”.