Athens, 1 February 2018—
IFC, a member of the World Bank Group, has invested €50 million in mortgage covered bonds issued by Alpha Bank, supporting Alpha Bank in regaining access to international capital markets and boosting investor confidence in the Greek economy.
The 5-year maturity bond is backed by a portfolio of residential mortgages. The offering, part of a €8 billion covered bond program of Alpha Bank, received a very strong market demand from mainly private investors including asset management companies, pension funds, and other investment institutions. IFC became an anchor investor in the transaction, encouraging significant additional flows of international funds to Greece.
Mr. Vassilios Psaltis, General Manager - Chief Financial Officer of Alpha Bank said: “We welcome IFC’s investment and support for this transaction. Our issuance was warmly welcomed by the market, with very high demand allowing us to further strengthen our presence in the international capital markets.”
The landmark investment fits into IFC’s strategy in Greece to strengthen the financial system and boost long-term funding. Alpha Bank Group and IFC have strengthened their partnership in 2015 when IFC became a minority shareholder with a €60 million investment in Alpha Bank during the recapitalization of the systemic Greek banks. Since 2016, Alpha Bank Romania and Alpha Bank have participated in IFC’s Global Trade Finance Program with $30 million and $80 million credit trade lines to support their local clients to tap new markets and commercial partners. IFC also provided a $50 million loan to Alpha Bank Romania in 2017.
“This important transaction is a strong signal for increasing confidence in the economy from international investors,” said Manuel Reyes Retana, IFC’s Regional Industry Head for Europe, the Middle East and North Africa. “The country’s banking sector is rapidly tapping back into international capital markets, a strong indicator of market confidence in an economic recovery.”
Covered bonds offer an attractive funding cost and are viewed as low-risk since they are backed by the assets of the issuing banks. They provide access to long-term funding for the issuing banks, while also increasing access to more affordable, long-term funding for borrowers. IFC’s investment will also help revive Greece’s real estate sector as it will allow Alpha Bank to issue more residential mortgage loans.
IFC has been a long-term partner of Greek companies and financial institutions, through support to subsidiaries of Greek banks in Eastern and Southeastern Europe, and has also helped Greek companies expand into emerging markets.
The investment in Alpha Bank’s covered bond issue is part of an IFC effort to support economic growth in Greece. IFC began operating in Greece in 2015 at the request of the Greek government and has made ten long-term investments totaling €490 million while also providing €275 million in trade finance lines.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
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