The Standard & Poor’s Rating Services said yesterday that the recent tender offer by National Bank of Greece (NYSE:NBG) was nothing more than a distressed exchange. On May 23, National Bank of Greece completed a tender offer on five series of preferred securities that were issued by National Bank of Greece Funding Ltd. Aman Jain of ValueWalk reported last month that Fitch Ratings has upgraded the National Bank of Greece from CCC to B-.

National Bank of Greece

According to S&P, the offer provided investors with much lower value to investors than the original securities had promised. The tender offer was launched on May 8, and the securities were guaranteed by the National Bank of Greece (NYSE:NBG), according to StreetInsider. S&P said that the issuer National Bank of Greece Funding Ltd. didn’t send relevant information to the rating agency on this exchange while launching the offer. That’s why S&P couldn’t take relevant rating actions on the subordinated debt and preferred securities at the time, the rating agency said.

National bank of Greece’s Five Series of Preferred Securities

Standard & Poor’s said if it had received information on time, it would have reduced the rating on three series from CC to C. Those three series are Series A Preferred Securities, Series D CMS-Linked Preferred Securities and Series E Preferred Securities of the National Bank of Greece. Then the rating agency would have restored the rating back to CC after the offer. Upon completion of the offer, the above three series had a value of about €50 million.

S&P said the offer won’t have affected the issue ratings of Series B preferred securities and Series C CMS Linked preferred securities. Both of them were rated C when the offer took place because of the National Bank of Greece’s decision to defer coupon payment on May 7. After the completion of the offer, these two series had a valuation of €32 million.

Recently, the bank shareholders also approved a recapitalization plan worth about 9.75 billion euros ($12.7 billion). National Bank of Greece (NYSE:NBG) shares were down 2.48% to $5.90 at 10:07 AM EDT.