Hovering the market if it considers that the National will have an extension of 18 months to be recapitalised, as absolutely valid according to information the Bank of Greece will only give 6 months notice to fill the capital gap of 2.18 billion euros.
NBG much earlier than April 15 are banks required to present their capital plans will present the plan of recapitalization.
intentions of the administration to sell insurance and some other activities deemed de facto not sufficient, and the only effective way to found these 2.18 billion funds is to sell the Finansbank.
Also another error that exists in the market is that the National chose not to make PRM, as have other ways to recapitalised.
however, this approach is completely wrong.
The National just can not implement PRM, partly because of the refusal of major shareholders to participate in new growth and because of the large discrepancy between the value of the previous PRM namely 4.29 euros and the current price at 3.50 euros.
Also The National Bank will repay the preference shares of $ 1.4 billion and, together with Eurobank will receive a 2 year extension.
If they convert the pref in common stock they will be free to do a bond emission like Piraeus and Alpha bank. But if they go on the market with new bond that pay interest they must pay state div too (coco bond)?
I can't imagine what they will invent this time!! we'll have to wait until april 15 2014.....
Seems like a negotiation tool to get what they need on their political agenda to proceed with structural reforms Greece doesn't want to do. I doubt it even have to do with stress recap requirements, but more so tax reforms and deunionization among other things.
I expect these to roll, not like Greece has played chicken before on their upcoming maturities, guess who lost when no one flinched.
Reuters) - Greece's international lenders have agreed that a lower capital ratio can be used in a second stress test of the country's major banks, bringing it in line with a European banking benchmark, a banker close to negotiations told Reuters on Thursday.
The country's central bank has run a second health check on National Bank (NBGr.AT), Alpha Bank (ACBr.AT), Piraeus Bank (BOPr.AT) and Eurobank (EURBr.AT) to assess whether last summer's 28 billion euro recapitalization has left them capable of absorbing future shocks as bad loans keep rising.
The 'troika' of lenders from the International Monetary Fund, European Commission and European Central Bank had wanted the test to be based on a Core Tier 1 capital adequacy ratio of 9 percent, the same as that used in the first round of domestic health checks in 2012.
That rate reflected the high rate of bad loans in Greece's banking sector.
But the lenders agreed to cut the rate to 8 percent for the second check, bringing it into line with the benchmark used for European bank stress tests.
"The troika has agreed to a Core Tier 1 ratio of 8 percent in the baseline scenario," the banker said.
The lower reference rate will mean lower capital needs for Greece's four main banks.
The four are expected to need about 5 billion euros ($6.83 billion) in extra capital, two senior banking sources told Reuters last week, near the bottom of estimates that have ranged from 4.5 billion to 15 billion euros.
The troika, which met with the Bank of Greece's top brass on Wednesday, is checking the methodology used in the stress test. The two sides are expected to hold another meeting before the results are released by late next week, the banker said.
Non-performing loans held by Greek banks rose to about 31 percent of their total loan book at the end of the third quarter last year from 29.3 percent at the end of the first half.
Expect a significant swing up or down depending on what happens with this. I don't believe "the final decisions will be made no later than the end of next week". Absolutely nothing has happened on time over the last few years.
The troika, as mentioned in this information, put the government in the meeting with the Governor of the Bank of Greece on the table the issue of repayment of preference shares (Law Alogoskoufis) the total nominal value of 3,715 billion acquired by the state by exchanging bonds. These bonds must be repaid in May, but in any case, the final decision should be taken within the next few days. Circles of bog pay to settle the matter of preference in Greek government which is the body and then the shareholder bank funding.
The final decision rests with the European Central Bank, which, as sources say this until now denied to scroll rank for the distant future. The question that arises is what happens. Government sources said the ECB insists on immediate repayment of the bonds.
If we do this then the systemic banks will have to find the total amount of 3.7 billion euros. That is about 1 billion euros each systemic bank.
However, in any case, the final decisions will be made no later than the end of next week.
National Bank – Won’t proceed with a new rights issue (press)
According to euro2day.gr citing NBG’s officials, NBG won’t proceed with a new rights issue to cover the additional capital needs of c#$%$2bn resulting from the follow-up stress test, arguing that this amount can be covered by internal capital generation plus the sale of non-core assets and foreign banking units. Same source argues that these capital needs are related exclusively to the bank’s SEE and Turkish subsidiaries, with the Greek operations having no capital needs. Moreover, the stress test has taken into consideration both the already concluded capital actions (i.e. Pangaea 66% stake sale plus the Asteras disposal both od which resulted in a c70bps boost in NBG’s capital ratios), as well as the 40% stake sale in Finansbank (adding another c270bps to CT1 ratio at a P/BV multiple of 1.2x and on current Euro/TRL parity, on our numbers).
for what I can tell I saw the other day an "invisible hand" buy at 14.85 like 20 K share... it is very slow but I think that some people are buying in the stock!!
Good luck :)
I too tendered my positions at 12.50. But when I gathered the 13F data, the institutional take was less than 50%, which is warranted because it created a liquidity event to take money off the table after a huge run. But of the 4.2MM shares they held at June 2013, they retained 2.5M shares as reported in September 2013. So that in itself is an economic signal as to how institutional money believe the preferred was worth more than the tender.
Also volume is scant and there is no market besides the one off sales. On one end this sorts of traps current holders because there is no market to offload these securities. On the other hand, the volume is so low, that there is no way to add to positions or for new funds that would be interested in the asymmetry to start a position in it. So it lists around $15 and moves based on the real small retail trade, who are more day traders than holders.
Unfortunately this is a personal account trade not an institutional trade from here on up...
Sentiment: Strong Buy
Well. As you know, they can extend the government preferred or change the terms (rate) without impacting the $25 preferred. Looks to me no dividend this year on the preferred, nor next year. Next year subject to a check of financials when the Annual comes out along with any CC on it related to future events.
I've been out of these since the tender, not looking to get back in. However, I'd like to see NBG offer a swap for common (not mandatory), at par, or even at 18-20 would be good for current holders and give a minor boost to the capital statement. I will say I've wonder when I've checked how the price here is holding so strong, and behind it wonder if NBG really would like to do something with these (and big holders might know it), but are being fended off big the government/EU.
Cheers and a good year to all,
Discusses possible two year extension of government preferred with a change to the interest rate of 2% increase per each year of extension. Currently government preferred is at 10%, change in terms would mean 12% during first year of extension, 14% during second year. Not sure this matters much as they aren't currently paying, however a change in terms may require us to be addressed.
Bankingnews further offers a recommendation that government preferred instead be converted to common rather than extended. This would be great for us, but this scenario does not appear likely.
Risk of nationalization is still present due to political developments. Also, the Turkish lira is getting hammered which devalues Finansbank. NBG has not stated if they are hedging the currency exposure.
I do not know. I do not expect a tender offer in the immediate future. The previous tender was offered on May 31, and expired on June 28.
Thank you for your thoughts, do you know how many days in advance the tender offer or swap must be communicated to the shareholders?
Just to be clear, I don't personally consider this a likely scenario. I expect that the govt. preferred will be extended. If it is extended, expect the price here to drop.
if a tender offer... how many days in advance the offer must be place before the 14 of May? is 60 days? or 30 days?
Sentiment: Strong Buy
After thinking about this, I have to agree with nongkencity - there may be a conversion to common at $25.
The government preferred is payable May 2014. There has been an expectation that the govt. preferred would receive an extension, but it appears that some think this will not happen. If the govt. preferred is not extended, then it must be repaid or converted to common at $25. As we are pari-pasu with the govt. preferred we should receive the same treatment.
Given this scenario, there could also be a tender offer prior to May.
I am still holding a fairly large position, avg. a little over $5. It's funny because right before this move I was thinking that the risk is increasing due to the possibility of elections and SYRIZA statements about nationalizing the banks.
Just a humble opinion, with not hard facts. Bank is getting healthier, anyone short has had their profits, if bank wants to move forward, something need done to the preferred stock.
I think we are just seeing speculation. Price is up, but still at 68% of par which is still very junk status.
I'm long from under $4 on a small position, just waiting on something better before I have to claim the capital gain and have to pay the taxes.