Greece’s Alpha Bank has sealed €50mn, in senior notes, from the European Bank for Reconstruction and Development (EBRD), as part of an expected €640mn SME-backed loan securitisaton.
The transaction structure is expected to comprise of around €320mn in senior and €320mn in junior notes. The EBRD is subscribing to €50mn of the senior notes while the European Investment Bank (EIB) and Citibank are subscribing to the remainder. Alpha Bank will subscribe to the junior notes.
The underlying loans in the asset pool are originated and sold by Alpha Bank to Alpha Proodos and are composed of working capital and investment loans to SMEs. The securitised pool will have a one-year revolving period.
The recent reopening of structured finance for Greek banks is an important signal of easing market conditions, after some years when securitisation as a funding source has not been available.
The loan will go towards supporting Alpha, one of four systemic banks in Greece, and its access to medium-term funding, while providing a viable alternative to volatile short-term deposits and Eurosystem funding. This is expected to strengthen investors’ confidence in the banking system.
The investment aims to also benefit Greece’s real economy by alleviating the shortage of credit supply for SMEs. According to the EBRD, a third of Greek SMEs regard access to finance as their most pressing concern and restoring and enhancing this access is crucial for the economy’s ability to return to growth.
Alpha Bank CEO, Demetrios Mantzounis, comments: “The successful completion of the SME securitisation is an essential step to reviving Greek entrepreneurship and the economy.”
EBRD director, head of financial institutions and insurance in Turkey, Noel Edison says: “Our aim is not only to provide funding for SME portfolio growth, but also to convey a message of trust and confidence. The success of the project will send a strong signal to the market and is expected to attract more commercial investors to consider investing in collateralised debt issues by Greek banks.”
GTR reported on the first such recent transaction, in October 2016, when the National Bank of Greece, secured the first SME-backed loan securitisation since 2007.