Bank of Greece, Piraeus Bank, Alpha Bank and Eurobank Ergasias has been upgraded by Fitch today reflecting recovery in the Greek economy. The upgrades in the rating have come after the recapitalization and improvement in the macroeconomic environment in the country. This enhancement in the economic scenario of the country has been reflected in the rating of agency from CCC to B-.
National Bank of Greece (NYSE:NBG) approved the plan of recapitalization a few weeks back. The bank passed the share offerings worth euro 9.75 billion ($12.7 billion). The biggest four lenders in Greece were in need of 27.5 billion euros in order to reload their capital. The capital will be utilized in improving the solvency ratio of the central bank.
Michael Mauboussin: Challenges and Opportunities in Active Management And Using BAIT #MICUS
Michael Mauboussin's notes from his presentation at the 2020 Morningstar Investment Conference, held on September 16th and 17th. Q2 2020 hedge fund letters, conferences and more Michael Mauboussin: Challenges and Opportunities in Active Management Michael Mauboussin is Head of Consilient Research at Counterpoint Global in New York. Previously, he was Director of Research BlueMountain Capital, Read More
The ‘Long-Term Issuer Default’ Ratings has been upgraded to B- from CCC, Short-term IDRs to B from C and Viability Ratings to b- from f.
The Support Rating Floors of the Greek Banks have also been revised to ‘No Floor from CCC and the Support Rating (SR) at 5 affirmed.
The Fitch has kept its rating stable on the Long-term IDRs of the banks. The IDR of the bank is a negotiable certificate, which the bank issues showing that it has owned stock of a foreign company and these shares are kept in the trust. The International Depository Receipt (IDR) is the same as an American Depository Receipt (ADR) in the United States.
Other Signs of Recovery
Signs of recovery of Greece are strong and reflected in the interest showed by local and international private equity firms in Greece for potential purchases, as low valuations compared to yield is one thing which is luring investors.
According to a report in Reuters, private equity investors are planning to invest in Greece seeking gains. Hedge funds are eyeing the cheap valuations they are getting in the country, and are looking for suitable investment opportunities in Greece, Spain, Portugal and Italy.
Theodore Kiadikis, partner of Global Finance, holds the opinion that this is the right time for investors to look to Greece. He said that the present opportunity is the apt, and strong enough to be considered by the investors. Additionally, he said that investment should have been started two years back, but the economic condition of Greece was not good, due to which it failed to find investors. The private equity market in the Greece was less lucrative compared to other European countries as well as the United States.
Third Points’ Dan Loeb started a Greece based hedge fund last month, betting on a recovery in the indebted economy. Similar to his earlier funds, this Greek focused fund will look for event-driven opportunities in Greek assets.