To me this is a foregone conclusion. The fact that just a few weeks ago the President of NBG stated there is no need for raising capital.
Two weeks later we get raising capital. First that tells me that NBG management cannot be trusted.
Second, NBG sold off part of their gem Finansbank. About 25% to be sold off. You don't sell off your gem to acquire some other asset. So a merger acquisition looks to be ruled out.
Third, Raising $2.8 bill Euro and there is $8.5 bill euro Greek Govt Bonds in portfolio that are not being held to maturity, tells me, NBG is setting up for $2.8/$8.5 or 30% restructuring.
Sorry the link doesn't work.
If you know how to set Yahoo charts, input the time period Nov 19, 1990 to Sept 5, 2000.
C moved up 35x during this period as it recovered from emerging markets lending fiasco of late 80s.
To illustrate my point about C:
Please, don't misunderstand, I'm not saying NBG will have same run.
What I'm saying is it's very important to focus on and understand how NBG plays its hand from here and on its stock valuations (risks are overdiscounted, in my opinion), rather than on the attention grabbing headline news.
Again about time and good management: if you review the history Citigroup's emerging countries loan debacle in the late 1980s, that it managed to (barely) escape collapse meant it gained time to recover. Indeed, over the decade of the 1990s, it's profit stream allowed it to repair its balance sheet, and the stock recovered spectacularly, I believe to the tune of ~30x. I know this because I was sitting in a Starbucks, sipping my latte and reading about the imminent demise of C in 1990. Unfortunately, I flipped the page and moved on without taking action and have regretted it to this day.
Similar stuff with the S&L crisis, again in the 80s.
Same with Chrysler in late 70s, Apple in the 90s, Ford this decade, etc, etc.
History tends to repeat itself.
"I still think NBG is setting up for a haircut in bonds and a pretty substantial one."
But, another perspective might be that management is going on the offensive by further strengthening its balance sheet.
Look at it this way, management doesn't control the share price directly in the short term, the market does and it can be unreasonable. After a successful capital raise, the market might see the reduced risk and bid up the share price.
Also, consider that the Greek fiscal/sovereign debt crises are applying Darwinian/evolutionary pressures---the strongest will survive and become stronger.
Among Greek banks, NBG clearly has the best shot to emerge even stronger and bigger, and with higher share price---eventually, that is.
If NBG is going to re-structure 30% of debt why would IMF give away 8.28 bln. loan. This would probably be almost 10 bln by end of sept.
IMHO -> IMF/EU don't want greece to default under any conditions, if they do, German/France bank would have to take 30% cut on there books and this could be another Wamu/Lehman type domino affect.
The IMF said that, so far, some 8.28 billion euros out of its total 30-billion
http://www.reuters.com/article/idUSTRE68951420100910n-euro loan have been given to Greece
I see a large loss coming.
If they were going for an acquisition, they wouldn't dilute at $1.33. Especially when the stock was near $3 when the announcement was made. Too desperate.
NBG is getting ready for a large loss or for a large acquisition.
My opinion is that NBG is getting ready for the second.
If you see a big haircut coming in Greek Govt Bonds you have to read the following updated Press Release
I know what the statements are, but dig for the truth.
NBG gives up part of Finansbank so they can raise money for Finansbank. Please? Any thinker here know that is crap.
Why dilute at €5.20 or $1.33? This smacks of desperation.
The truth is becoming clearly obvious in my opinion, NBG is getting ready for a large loss. They will need the money to cover against those losses. I see a big haircut coming in Greek Govt Bonds. The 10 yr GGB are currently trading at 11.7 a whold 9 points above the German Bund.