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Alpha Bank won the battle for the increase of its capital easily

01 June 2013 / 11:06:02  GRReporter
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Alpha Bank managed to increase its capital fairly easily and will remain in the private sector. Investors’ strong interest from the very first moment, as well as unofficial data, showed a 1.5-fold coverage in terms of the right of preference and a 5-fold one in private capital.

Alpha Bank paved the way for the other two Greek banks, which will increase their capital in the coming days - the National Bank and Piraeus Bank, and which apparently also enjoy investors’ positive interest. With the increase of its capital, which ended yesterday, Alpha Bank covered the target of 12% of its capital needs, gaining the amount of 550 million euro. Official reports about the recapitalisation and shareholders will be issued on Monday – both on the 457.1 million euro that came from the exercise of the rights to preference, and the 92.9 million euro from private capital.

From the moment when Alpha Βank collected 550 million euro and covered 12% of its capital increase from individuals, it will no longer issue CoCos (Contingent Convertibles), and, for each new share, holders will receive a warrant that gives them the right for the purchase of 7.33 shares of the bank in the future. New shares and warrants will be traded on the Athens Stock Exchange as of 10 June.

Alpha Bank is the first Greek bank that tried its hand on the market after a long period of time during which the country and banks did not have access to international investors.

Contacts with institutional portfolios and investment houses were positive from the start, and guarantees for the coverage provided to Αlpha Bank by JP Morgan, Citigroup HSBC and Credit Agricole, although they were not strictly necessary, increased the recapitalisation’s dynamics, since they put the bank in the scope of large investors’ radars. As a result, interest increased, including on the side of small private investors. The bank wanted both large and small investors to participate in the recapitalisation so that it could maintain the traditional diversity among shareholders. Large investors are showing interest in other banks that emerge on the market, too.

Alpha Bank’s way to the 10% recapitalisation, supported by the favourable contract with Credit Agricole, was easier. The management of the bank aimed to strengthen its communication with the international investment community and maintain interest in the bank, seeking the day after the recapitalisation, when the sector will be willing to escape from the Financial Stability Fund and will rely on private investment capital alone. In this respect, warrants are particularly important because they expand private participation.

Tags: recapitalisation Alpha Bank capital shareholders warrants
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