Athens Digest 05.03.2019

• Green light for 10-year bond issue

• Migrant arrival numbers concern Athens

• Economic sentiment rebounds on improvement in industry and services

• Piraeus Bank sells Albanian subsidiary

With yields still dropping, Greece has announced plans to issue a 10-year bond for the first time since the country was plunged into crisis in 2010. The Public Debt Management Agency announced its intention to proceed with the sale following a sovereign rating upgrade by Moody’s late on Friday by two notches to B1. Markets continued to signal investor appetite for government debt with the yield on Greece’s 10-year bond dropping to 3.67 percent. The upcoming auction follows a successful sale in January when Greece raised EUR 2.5 billion with a heavily oversubscribed five-year bond.

Greece has urged European allies to redouble burden-sharing efforts for migrants and refugees, warning that its capacity has been strained by a surge in arrivals in 2018. Dimitris Vitsas, the Greek migration minister, has told the NATO Parliamentary Assembly that despite the sharp drop in arrivals since the 2016 EU-Turkey agreement, the 100,000 arrivals recorded in 2018 represented a 10 percent increase on the year at the islands and a 284 percent increase at the land border with Turkey. Overall, Vitsas said, 1.5 million migrants and refugees had traveled to Greece illegally since 2015, and that 73,000 currently remain in the country. Those include 23,000 living in subsidized apartments, 19,000 in mainland camps, 7,000 in hotels and hospitality accommodation, and 15,000 on the islands.

Economic sentiment in Greece has rebounded to its highest level in five months, helped by a brighter performance in industry and services. The monthly survey by Greece’s Foundation for Economic and Industrial Research, IOBE, said the index has risen to 101.3 in February from 99.6 the previous month. The survey found that a previous improvement in retail had proven to be short-lived. “Economic sentiment has presented a mixed picture. The pre-election period has raised expectations,” the report said. “However the timing of the elections remains uncertain and the expectations have been offset by opposing factors in the domestic and international environment that suggest the existence of a wait-and-see attitude.”

Piraeus Bank has announced the completion of the sale of its 98.83 percent stake in its Albanian subsidiary, Tirana Bank ShA, to Balfin Shpk and Komercijalna Banka AD, after the transaction was approved by Albanian authorities as well as the Hellenic Financial Stability Fund. The total consideration amounts to EUR 57.3 million and the transaction is capital accretive for Piraeus Bank Group. Based on Group reported CET1 ratio as of September 30, 2018, the completion of the transaction leads to 11bps CET1 ratio increase, through EUR 0.4 billion RWAs release. UniCredit Group acted as financial advisor to Piraeus on the Transaction. Norton Rose Fulbright acted as international legal advisor, and Boga & Associates acted as local legal advisor to Piraeus on the Transaction.

On our Radar: Skyline Spat
The government has suspended building licenses for high multi-storey buildings in an area of Athens near the Acropolis following a surge in development of tourism-related apartments and hotels. George Stathakis, the environment minister, signed the order halting licenses for one year for buildings of 17.5 meters or higher in the central Acropolis, Makriyianni, and Koukaki areas. The action follows protests against the construction of a high rise hotel facing the Acropolis Museum, and concerns that a construction boom would further block a street-level view of the Acropolis.