The Board of Directors has approved the issue of Convertible Enhanced Capital Securities (CECS) of up to €294 million through pre-emption rights to all existing shareholders.
The CECS will qualify as Tier 1 Capital under Basel III.
The CECS will offer a coupon of 7%. The conversion price has been set at €1.80 as had been decided by the Bank’s Board of Directors on November 11th 2010 and announced to the Shareholder’s Extraordinary General Meeting on November 18th 2010
Positive uplift on both Group’s Tier 1 and Total Regulatory Capital ratios of 110bps to 13.1% and 14.8% respectively
The Board of Directors of Marfin Popular Bank (“MPB”) convened on April 13th 2011, and has decided to proceed with the issue of Convertible Enhanced Securities (CECS) of up to €294,056,786. This issue is part of the €660 million Convertible Security Issue that was approved by the Bank’s Board of Directors on 11th November 2010.
The planned issue aims to further align the Bank’s capital structure with Basel III requirements, enhance its already strong capital position, and thus underpin its stated medium term strategic objectives. MPB has not received any government support neither in the form of liquidity nor in the form of capital. This, combined with its enhanced capital position, will enable the Group to further consolidate its leading position in Cyprus while allow it to simultaneously strengthen its rapidly expanding International Business Banking (“IBB”) as well as broaden its Emerging European footprint.
The approved issue will enhance the Group’s Tier 1 and Total Regulatory Capital ratios by 110 bps to 13.1% and 14.8% respectively, based on 31st December 2010 pro-forma numbers (adjusted for the recent €488 million share capital increase & the disposal of 85% of MPB’s Australian subsidiary)
The CECS will be offered to all existing shareholders through pre-emption rights (“Rights”) in exchange for a cash consideration of €1.00 per CECS and at an exchange of one (1) CECS for five (5) Rights.
The detailed terms of this Convertible Enhanced Capital Securities issue are subject to obtaining approvals by all relevant regulatory authorities.
