Hellenic Bank targets €13m annual savings with notes buyback
Hellenic Bank has announced its intention to repurchase existing Convertible Capital Securities 1 and 2 (CCS 1, CCS 2) valued at nearly €130 million.
The buyback, expected to save the bank approximately €13 million in annual interest expenses, is pending approval from the European Central Bank (ECB).
During a meeting on November 5, 2024, the bank’s board of directors approved the submission of an application to the ECB for prior authorisation of the repurchase.
This application, in accordance with Articles 77(1) and 78(1) of Regulation (EU) 575/2013, aims to redeem the CCS 1 (ISIN: CY0144170111) and CCS 2 (ISIN: CY0144180110) securities at face value, inclusive of accrued interest, based on the conditions outlined in the 30 September 2013 Prospectus.
The CCS 1 and CCS 2 securities, totalling €1.6 million and €128.1 million respectively, are perpetual and carry fixed annual interest rates of 11 per cent and 10 per cent.
Interest on these notes is paid quarterly, with payment dates set for March 31, June 30, September 30, and December 31.
If approved, the buyback could have an effect on Hellenic Bank’s capital ratios, with an estimated decrease of 2.2 percentage points in the Total Capital and Tier 1 ratios as of September 30, 2024, according to the bank’s recent financial results.
The CCS 1 and CCS 2 securities were issued during the 2013 financial crisis and do not have a set maturity date.
Finally, it was reported that Hellenic Bank will provide further updates on the buyback application and any subsequent developments in due course, subject to regulatory approval.