Ethniki Insurance Prices Inaugural €200 Million Tier 2 and Restricted Tier 1 Perpetual Bonds
Piraeus Bank S.A. (“Piraeus” or the “Bank”) has announced that its wholly owned subsidiary, “The Ethniki” Hellenic General Insurance Company S.A. (“Ethniki Insurance” or the “Issuer”), has successfully priced an inaugural dual-tranche subordinated bond transaction with a total value of €200 million.
The landmark transaction consists of two €100 million securities: a Tier 2 bond and a Restricted Tier 1 (RT1) perpetual bond. The issuance represents an important milestone for Ethniki Insurance as the company establishes direct access to international debt capital markets and broadens its sources of regulatory capital.
The transaction is also significant for the Greek insurance industry, as Ethniki Insurance becomes the first Greek insurer to raise capital through the debt capital markets, according to Piraeus Group Chief Executive Officer Christos Megalou.
The successful pricing demonstrates strong investor appetite for Ethniki Insurance and provides the insurer with additional financial flexibility as it pursues its strategic growth plans under the broader Piraeus Group strategy.
€200 Million Dual-Tranche Transaction
The inaugural issuance comprises two subordinated instruments with different capital characteristics and maturity structures.
The first tranche is a €100 million Tier 2 bond carrying a fixed annual coupon of 5.25%. The instrument has a maturity of 10.25 years and includes an issuer call option after 5.25 years.
The second tranche is a €100 million Restricted Tier 1 perpetual bond, carrying a fixed annual coupon of 6.875%. The RT1 bond is perpetual and includes a first issuer call option after 5.5 years.
Together, the two securities provide Ethniki Insurance with €200 million of additional capital resources while diversifying the composition of its regulatory capital.
Settlement for both the Tier 2 and RT1 notes is scheduled for September 9, 2026. The securities will be listed on the Luxembourg Stock Exchange’s Euro MTF market, providing the instruments with access to an established European listing venue.
The transaction is expected to strengthen Ethniki Insurance’s financial position and support its ability to meet regulatory capital requirements while maintaining flexibility to pursue future business opportunities.
Strengthening Regulatory Capital
One of the key objectives of the transaction is to strengthen Ethniki Insurance’s regulatory capital position.
The company’s Solvency II ratio as of June 30, 2026, calculated on a pro forma basis for the new bond issuances and the redemption of an existing €125 million 10-year Tier 2 instrument, is approximately 190%.
The Solvency II framework is designed to ensure that insurance companies maintain sufficient capital relative to the risks associated with their businesses. A strong solvency ratio provides an important indicator of an insurer’s ability to withstand adverse conditions and meet its obligations to policyholders.
Ethniki Insurance’s approximately 190% pro forma Solvency II ratio demonstrates a substantial capital buffer following the transaction and the planned redemption of the existing Tier 2 instrument.
The new securities will also diversify the company’s sources of own funds. Rather than relying exclusively on retained earnings or shareholder-related capital support, Ethniki Insurance is developing a broader capital structure that includes direct access to institutional investors in the international debt markets.
This diversification can provide additional flexibility as the company expands its operations and executes its longer-term strategic plans.
Strong International Investor Demand
The transaction received a strong response from institutional investors.
Approximately 100 institutional investors participated across the two tranches, while the combined order books reached more than €600 million at their peak.
With a final issuance size of €200 million, the transaction was therefore more than 3.0 times oversubscribed.
The level of demand enabled Ethniki Insurance to price the bonds significantly tighter than the initial guidance provided to investors. The pricing was tightened by approximately 30 basis points for the Tier 2 tranche and 37.5 basis points for the RT1 tranche, reflecting the strength of investor demand.
Strong order books and tighter pricing are important indicators of market confidence. For Ethniki Insurance, the response provides evidence that international investors were willing to assess the company’s credit and capital profile favorably despite this being its first transaction in the international debt capital markets.
The transaction also expands Ethniki Insurance’s investor base and establishes relationships that could be relevant to the company’s future financing activities.
Broad Investor Distribution
The issuance attracted a diversified mix of institutional investors.
For the combined transaction, asset managers received approximately 55% of the allocation, while banks and private banks accounted for approximately 25%. Hedge funds and other investors received approximately 20%.
The geographic distribution was also notably international. More than 70% of the combined issuance was allocated to international institutional investors.
Demand came primarily from investors in France and the United Kingdom, highlighting the international reach of the transaction and the ability of Ethniki Insurance to attract investors beyond its domestic Greek market.
The diversity of the investor base is strategically valuable because it reduces dependence on a narrow group of domestic capital providers and increases the company’s visibility among international fixed-income investors.
The successful participation of asset managers, banks, private banks, hedge funds and other institutional investors also demonstrates broad interest in the transaction across different investor categories.
First Greek Insurer to Access Debt Capital Markets
The transaction represents a notable development for Ethniki Insurance and the wider Greek insurance sector.
Christos Megalou, Piraeus Group’s Chief Executive Officer, described the issuance as a milestone for both the company and the Greek insurance industry.
According to Megalou, Ethniki Insurance is the first Greek insurer to raise capital through the debt capital markets. He also highlighted the strength and international breadth of investor demand as evidence of confidence in the company’s franchise and future prospects.
The transaction is closely connected to Piraeus Group’s broader 2030 strategy, under which Ethniki Insurance is positioned as an important component of the group’s future financial-services platform.
A well-capitalized and independently financed insurance business can provide Piraeus with a broader revenue base and greater diversification across financial services.
For Ethniki Insurance, access to international capital markets provides an additional avenue for financing its growth while reinforcing its independence and financial flexibility.
Supporting Piraeus Group’s Broader Strategy
Ethniki Insurance is expected to play a significant role in Piraeus Group’s long-term strategic development.
Piraeus has been working to build a more diversified financial-services platform, and the insurance business represents an important component of that strategy.
The successful €200 million issuance allows Ethniki Insurance to strengthen its capital structure while establishing a direct relationship with international debt investors.
Megalou emphasized that a well-capitalized and independently financed Ethniki Insurance will support Piraeus Group’s ambition to build Greece’s leading integrated financial-services platform.
The insurance business can complement Piraeus’s banking operations by providing a broader range of financial and protection products to customers.
As the insurance company grows, the combination of banking and insurance capabilities may also provide opportunities to develop more integrated solutions for individuals, businesses and other customers.
Management Confidence in the Insurance Franchise
Dimitris Mazarakis, CEO of Ethniki Insurance, said the strong reception of the inaugural Tier 2 and RT1 issuance reflects investor confidence in the company’s franchise, strategy and long-term prospects.
Mazarakis also emphasized the importance of the transaction in optimizing Ethniki Insurance’s capital structure and diversifying its sources of own funds.
The additional capital provides the company with a stronger foundation for pursuing its strategic priorities and growth ambitions.
The transaction also forms part of a broader transformation program at Ethniki Insurance. Working together with Piraeus, the company is focused on accelerating its transformation and unlocking synergies across the broader group.
The objective is to strengthen the company’s ability to deliver insurance products and services that are simple, innovative and reliable.
Mazarakis noted that the company’s strategy is ultimately focused on continuing to support customers and helping them protect the assets, businesses and interests that matter most.
Tier 2 and RT1 Instruments
The two securities have different roles within Ethniki Insurance’s capital structure.
The Tier 2 bond has a defined 10.25-year maturity and carries a 5.25% fixed annual coupon. Its issuer call option becomes available after 5.25 years, subject to applicable conditions.
The Restricted Tier 1 bond, by contrast, is perpetual and carries a higher fixed annual coupon of 6.875%. Its first issuer call opportunity occurs after 5.5 years.
The combination allows Ethniki Insurance to raise capital across two different subordinated structures and further diversify its regulatory capital resources.
The use of both Tier 2 and RT1 instruments also demonstrates the company’s ability to access different segments of the institutional capital markets.
For investors, the two securities provide exposure to Ethniki Insurance through instruments with different structural and maturity characteristics.
Capital Structure Optimization
Beyond the immediate capital raised, the transaction is designed to optimize Ethniki Insurance’s overall capital structure.
The company is issuing €200 million of new subordinated debt while also planning to redeem an existing €125 million 10-year Tier 2 instrument.
The resulting capital structure is expected to provide the company with an improved mix of regulatory capital resources while maintaining a strong solvency position.
The pro forma Solvency II ratio of approximately 190% following the new issuance and redemption provides an important indication of the resulting capital strength.
Maintaining an appropriate level of capital is essential for an insurer pursuing growth. Strong capitalization allows an insurance company to absorb potential volatility while continuing to invest in technology, products, distribution capabilities and customer services.
Establishing Long-Term Capital Markets Access
Another important outcome of the transaction is the establishment of Ethniki Insurance’s direct access to international debt capital markets.
For a company completing its inaugural issuance, successfully executing a transaction can be an important step toward developing a recurring investor base.
The strong demand generated by the €200 million offering gives Ethniki Insurance an initial reference point in the international subordinated debt market.
The transaction also increases the company’s visibility among institutional investors and potentially creates a broader platform for future capital markets activity.
The listing of the notes on the Luxembourg Stock Exchange’s Euro MTF market further supports the international positioning of the transaction.
Transaction Advisers
Goldman Sachs Bank Europe SE acted as Sole Global Coordinator for the transaction.
Goldman Sachs Bank Europe SE, Piraeus Bank S.A. and UBS Europe SE acted as joint lead managers.
Legal advice to the issuer was provided by A&O Shearman and Bernitsas Law Firm.
The involvement of major international and domestic financial institutions helped support the execution and distribution of Ethniki Insurance’s inaugural debt capital markets transaction.
The successful €200 million dual-tranche issuance marks a significant stage in Ethniki Insurance’s financial and strategic development.
With the transaction, the company has strengthened its regulatory capital resources, diversified its sources of own funds and established direct access to international debt investors.
The approximately 190% pro forma Solvency II ratio as of June 30, 2026, following the new issuance and redemption of the existing €125 million Tier 2 instrument, provides a strong capital foundation for the company’s next phase of growth.
Investor demand was a particularly notable feature of the transaction. With order books exceeding €600 million and approximately 100 institutional investors participating, the issuance attracted more than three times the amount of demand relative to the €200 million transaction size.
The participation of international investors, who received more than 70% of the allocation, also demonstrates the company’s ability to reach beyond the domestic Greek market.
For Piraeus Group, the transaction strengthens the position of Ethniki Insurance as an important pillar of its 2030 strategy. For the Greek insurance sector, it represents a landmark transaction that demonstrates the potential for a domestic insurer to access international debt capital markets.
As Ethniki Insurance continues its transformation and pursues its growth ambitions, the strengthened capital structure and expanded investor base are expected to provide additional support.
The company’s management will now have greater financial flexibility to execute strategic priorities, pursue growth opportunities and invest in initiatives designed to improve customer service and operational capabilities.
Ultimately, the inaugural €200 million Tier 2 and RT1 issuance represents more than a capital-raising exercise. It marks a strategic step in the evolution of Ethniki Insurance, strengthens its position within Piraeus Group and establishes a new channel through which the insurer can access international capital markets.
With a stronger regulatory capital position, diversified funding sources and significant international investor participation, Ethniki Insurance enters its next phase with a solid financial foundation and a clear focus on long-term growth and transformation.
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