Last week Eurobank EFG successfully concluded its first interbank repo agreement with Greek Government Bonds as collateral.
The amount of the 2 year repo agreement was €300m and the counterparty was an international investment bank. It is worth mentioning that the transaction was conducted at very competitive terms. i.e. interbank rate (Euribor) plus a spread of less than 200 basis points.
Furthermore, Eurobank EFG in the recent past has concluded various repo agreements, using as collateral bonds from its international bond portfolio, thus securing additional funding from the international markets at competitive terms in excess of €500m.
The transaction mentioned above is the first in the interbank market (with Greek Government Bonds as collateral) since Greece’s participation in the IMF/EU Emergency Financing Mechanism. Its successful conclusion reflects the ongoing improvement of the country’s fiscal position and the consequent improvement of its international image, as well as Eurobank’s strong capital base.
Eurobank’s repo transactions in the international markets constitute a first positive step towards the opening of the international markets to Greek financial institutions – a very important step towards the full normalization of the financial flows, since risks and adversities have yet to subside. The strict implementation of the Stability Program remains the determining factor for the recovery of sovereign credibility, the gradual ease of the concerns of the international investment community regarding the Greek Government’s ability to regain access to the international capital markets and for the revival of investment interest in Greek Bonds.