ATHENS – A successful issue of a Tier 2 notes from Piraeus Bank, worth 500 million euros, is credit positive for the bank, Moody’s said in an analysis released on Monday. The credit rating agency said that the Tier 2 note issue supported the bank’s capital adequacty rarising its capital ratio by around 110 basis points, while it also opened the way for achieving a strategic goal of significantly reducing non-performing loans in 2020 through securitization and diversified the bank’s funding sources.

Moody’s said that a new pro forma phased-in CAR rose to 17.1 pct following the latest Tier 2 issue, up from a goal of 14.25 pct set by supervision authorities. “The Tier 2 notes will moderate the impact that a revised NPEs reduction plan will have on the bank’s capital position, through two large securitizations worth around 7.0 billion euros in 2020. In comparison with the previous plan, the bank accelerates the reduction of NPEs with the aim to bring them below 8.0 billion euros by the end of 2022,” the credit rating agency said.

Moody’s added that the Tier 2 issue diversified the bank’s funding sources, improving its financing and liquidity profile. Deposits grew by around 5.2 pct in September, it added. It was the second Tier 2 issue completed by Piraeus Bank, the first one worth 400 million euros was made seven months ago. Piraeus Bank is the first Greek bank to issue non covered bonds in June 2019.