Greek Corporate Bonds Framework

Location:

Greece

Project number:

48846

Business sector:

Manufacturing and Services

Notice type:

Private

Target board date:

20 Jun 2017

Status:

Board Approved

PSD disclosed:

03 May 2017

Sub-projects signed under this framework

Translated version of this PSD: Greek

Project Description

A Greek Corporate Bond Framework ("Framework") which will support the development of the local capital market in Greece by: a) signalling the Bank's commitment to develop the local corporate bond market; b) launching a dedicated framework to respond quickly to emerging demand; c) building market capacity thereby adding to depth and liquidity; d) supporting access to finance through the capital markets for SMEs and midcaps; and e) demonstrating to potential investors the viability of new issues.

Project Objectives

The Framework aims to support the development of the local corporate bond market in Greece by participating in public issues which will be listed on Athex. This will facilitate access of Greek corporates to the debt capital market. A well-functioning bond market expands companies' access to credit and provides alternative means of financing which is particularly relevant in Greece today where bank lending is constrained by the high level of NPLs.

EBRD's participation as long-term investor will help build issuer momentum and investor interest by signaling potential market uptake for a series of issues, thereby encouraging sustained issuer presence and investor participation.

Transition Impact

The transition impact of the Framework will be derived from two main sources:

1. Demonstration effects of new ways of financing: The Framework aims to demonstrate the viability of bond financing in the local capital market for a broad range of Greek corporates, while simultaneously broadening the investor base. The local corporate bond market has substantial development potential, as there has only been a few non-convertible corporate bond issuance so far. Participating in a number of issues over the near term will help build critical mass for outstanding bond issues needed to create pricing benchmarks, and develop market liquidity.

2. Standards for governance and corporate behaviour. While currently there are basic requirements for disclosure for local currency bond issues, there is room for improvement towards international standards. The local currency corporate bond issues supported as part of this framework will aim to increase secondary market activity as higher levels of disclosure will encourage more investors to enter the market.

Client Information

The Framework will be available for Greek corporates, excluding banks and non-bank financial institutions. The Framework will not concentrate on a specific set of corporates or sectors but will be available to issuers across various sectors and sizes ranging from SME's (currently 98% of Greek corporates) to large corporates.

EBRD Finance Summary

EUR 100,000,000.00

Total Project Cost

EUR 500,000,000.00 

Environmental and Social Summary

The Framework itself is not categorised; however, each sub-project will be categorised on a case by case basis and will be subject to individual environmental and social due diligence (ESDD). The ESDD for each sub-project will be determined on the basis of the specific use of proceeds, especially where this involves investment projects. Due to the capital market transaction rules, the ESDD will rely on publicly available information, the prospectus/offering circular and other information provided to all potential investors. Therefore, the Bank may not be able to undertake sub-project specific ESDD in accordance with its 2014 Environmental and Social Policy (ESP). The Bank will agree with each Issuer a Framework Agreement and an Environmental and Social Action Plan to structure each sub-project to meet EBRD Performance Requirements (PRs) and require the Issuer to use the proceeds in a manner compliant with the Bank's PRs. Where this is not possible, derogation to ESP for the sub-project may need to be sought from the EBRD Board of Directors. Category A subprojects will be submitted to Board for approval regardless of their size.

Technical Cooperation

None.

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

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