Greece has arranged its first SME-backed loan securitisation since 2007, as part of a €648mn offering of senior notes.

The reopening of structured finance for Greek banks signals an important easing of market conditions after years when securitisation as a funding source has not been available.

The notes are secured by loans provided by National Bank of Greece (NBG) to SMEs under Greek law.

Issued by Irish company Sinepia, the notes are listed on the Irish Stock Exchange and eligible for trading on the regulated market. Sinepa purchased a €648mn loan portfolio from NBG, using funds from the notes issuance.

The European Investment Bank (EIB) will invest up to €215mn in the notes while the European Bank for Reconstruction and Development (EBRD) and the European Investment Fund (EIF) will invest €50mn and €35 million respectively.

NBG is one of Greece’s four systemically important banks which between them hold over 90% of total assets in the financial sector. The EBRD participated in the successful recapitalisation of the banks in October last year and has since also provided trade financing facilities.

Director in the EBRD’s financial institutions team, insurance and financial Services, Noel Edison, says: “This is a landmark transaction. The return of securitisation sends a powerful signal to the market and it provides additional sources of much-needed funds for on-lending to the real economy. Securitisations offer a replicable mechanism which can boost bank lending by creating an efficient use of resources.”

Ratings company S&P Global gave the notes a BB rating while its peer Fitch gave the notes a B-.