Piraeus Bank Prices €500 Million Green Senior Preferred Bond at Record-Low Spread, Marking a Milestone in Its Sustainability and Capital Strategy
Piraeus Financial Holdings S.A. has announced another significant step in its ongoing commitment to sustainable financing and strategic capital development with the successful pricing of a new €500 million Green Senior Preferred Bond (the “Bond”). Issued through its banking subsidiary, Piraeus Bank S.A. (“Piraeus” or “the Bank”), the transaction marks one of the most notable capital market achievements for the institution to date—not only because of its strong investor reception, but also because it was priced at the tightest credit spread ever achieved by the Bank on a senior preferred issuance.
The bond carries a coupon of 3.375%, a maturity of six years, and features an issuer call option after five years, offering flexibility within the Bank’s long-term liability management strategy. Settlement is scheduled for 2 December 2025, following which the notes will be listed on the Luxembourg Stock Exchange’s Euro MTF market, a preferred listing venue for green and sustainable bonds in Europe due to its advanced sustainability-focused platform. The instrument is expected to receive an investment-grade rating of “Baa2” from Moody’s Ratings, reflecting growing market confidence in the Bank’s financial resilience and strategic trajectory.
Beyond its financial characteristics, the issuance carries major significance for the Bank’s environmental, social, and governance (ESG) agenda. The net proceeds are earmarked exclusively for the financing and refinancing of eligible green assets as outlined in Piraeus Bank’s Green Bond Framework, aligning the transaction with international best practices for sustainable financing. These eligible assets typically include renewable energy installations, green building developments, energy efficiency upgrades, pollution prevention projects, and other environmentally positive initiatives, all of which play a crucial role in the accelerating transition toward a low-carbon economy.
Anchored in Sustainability: ESG Leadership Reinforced by MSCI “AAA” Rating
This transaction comes at a pivotal moment for Piraeus Bank, following its recent ESG rating upgrade by MSCI to ‘AAA’—a distinction awarded to the world’s most advanced organizations in terms of managing environmental, social, and governance factors. Not only does this upgrade represent the highest possible rating, but it also positions Piraeus as the only Greek company to hold an AAA rating from MSCI. Within the global financial sector, such a rating places Piraeus among a select group of banks recognized internationally for their robust ESG governance, sustainable risk management, and meaningful climate-action strategies.
Being distinguished as an AAA-rated institution is more than a symbolic milestone. It reflects years of continuous work to integrate ESG considerations across all operational and strategic layers of the bank. This includes responsible lending policies, enhanced risk evaluation practices incorporating climate-related scenarios, transparent disclosures aligned with international sustainability reporting requirements, and the adoption of targeted initiatives to reduce environmental footprint. With investors placing increasing weight on ESG leadership, Piraeus’ rating upgrade plays a major role in strengthening its reputation and attracting long-term sustainable capital.
Deepening Green Financing Footprint: Four Green Bond Issuances Totaling €2.15 Billion
The Bank has emerged as a national leader and international contender in green financing. With the new issuance, Piraeus remains the only Greek bank to have successfully placed four green bonds in the capital markets—collectively amounting to an outstanding total of €2.15 billion. This continued activity demonstrates not only Piraeus’ execution capability in the sustainable financing market but also its extensive commitment to addressing climate-related challenges through financing and capital allocation.
Approximately €0.8 billion of the net proceeds from earlier green bond issuances have already been allocated to eligible green projects. These projects form a diversified portfolio of climate-positive investments that generate measurable environmental impact. They range from renewable energy development, where Greece continues to expand its wind and solar footprint, to green property development and infrastructure, energy-efficiency programs for households and businesses, and other initiatives that align with the bank’s broader decarbonization objectives.
This track record reinforces Piraeus’ position not only as a major financing partner for Greece’s energy transition, but also as an issuer with consistent market credibility in sustainable bond markets.
Strong Institutional Investor Demand Highlights Market Confidence
The latest €500 million Green Senior Preferred Bond attracted notable attention from the global investment community, drawing orders from more than 120 institutional investors. The distribution breakdown provides insights into the depth and diversity of interest:
- 66% allocated to asset managers, indicating widespread acceptance from Europe’s most active fixed-income investors.
- 29% allocated to banks and private banking institutions, showing strong demand from regulated financial institutions with long-term investment mandates.
- 5% allocated to other categories of investors, including pension funds, insurance firms, and ESG-focused specialty funds.
One of the most significant highlights of the allocation is the high level of international participation: over 80% of the bond was placed with investors outside Greece. The geographic distribution underscores the breadth of demand:
- France: 27% — reflecting strong appetite among French institutional investors, who are traditionally active in the green bond market.
- United Kingdom: 23% — driven by both traditional fixed-income desks and specialized ESG investors.
- Italy: 10% — showing sustained support from southern European markets.
An important dimension of the transaction is that the majority of allocations were made to ESG-dedicated investors. This reinforces that Piraeus is recognized not only for its credit fundamentals but also for its strategic sustainability orientation, making its green issuances particularly attractive to investors seeking to meet their own sustainable investment mandates.
Oversubscription of 4x Enables Record-Low Spread
The order book surged to more than €2.0 billion at its peak, representing a fourfold oversubscription relative to the €500 million target. Such overwhelming demand enabled an exceptionally strong pricing outcome for Piraeus Bank.
The Bank initially guided the market toward a credit spread of 125 basis points over the corresponding mid-swap rate. However, the combination of strong momentum and competitive bidding allowed Piraeus to tighten the final spread to a remarkably low 98 basis points—the tightest spread ever achieved on a senior preferred bond in the Bank’s issuance history.
This result reflects:
- Successful execution by the joint bookrunners
- Growing investor trust in Piraeus Bank’s financial outlook
- The appeal of sustainable instruments in an environment of increasing climate policies
- The market’s positive reaction to the Bank’s recent ESG achievements and improving credit fundamentals
Ultimately, the bond was priced with a final coupon of 3.375% and a re-offer price of 99.995%, positioning it competitively within the broader European green bond landscape.
Enhancing the Bank’s MREL Position
In addition to supporting green financing, the bond also plays an important regulatory role. The issuance strengthens Piraeus’ Minimum Requirement for Own Funds and Eligible Liabilities (MREL) position—a regulatory obligation designed to ensure that European banks maintain sufficient loss-absorbing capacity to protect financial stability in adverse scenarios.
By issuing a senior preferred instrument structured to be MREL-eligible, the Bank takes another step toward reinforcing its long-term regulatory buffer, supporting investor confidence and aligning with the prudential framework established by the Single Resolution Board (SRB).
Execution Led by Top Global Institutions
The success of the transaction is also attributed to the consortium of leading international banks that acted as joint bookrunners, including:
- Barclays Bank Ireland PLC
- BofA Securities
- Commerzbank
- Crédit Agricole CIB
- Deutsche Bank
- IMI-Intesa Sanpaolo
These institutions played a central role in structuring the issuance, marketing the instrument across global fixed-income desks, and managing the bookbuilding process. Their involvement underscores the international relevance and strong credit standing of Piraeus Bank in the capital markets.
Legal guidance for the transaction was provided by Allen & Overy and Bernitsas Law Firm, ensuring compliance with international regulatory and sustainability standards while maintaining the robustness of the issuance.
Strengthening Market Position and Advancing ESG Ambitions
The successful pricing of the €500 million Green Senior Preferred Bond adds another chapter to Piraeus Bank’s ongoing transformation and strategic realignment. In recent years, Piraeus has intensified its efforts to strengthen capital adequacy, enhance operational resilience, and drive sustainable lending across its portfolio. The Bank’s leadership team has emphasized a holistic approach to sustainability, underpinned by a meaningful climate strategy, transparent reporting, and the integration of ESG principles across decision-making.
This latest bond issuance stands not only as a financial milestone but also as a validation of Piraeus’ commitment to responsible banking. It demonstrates that international investors increasingly associate the Bank with long-term stability, climate responsibility, and strategic foresight.
Source Link:https://www.businesswire.com/
