Piraeus Bank Τier 2 bond meets strong demand, backed by Greek bond rally

Strong investor demand and a rally in Greek government bonds enabled Piraeus Bank to significantly reduce its borrowing cost with a new Tier 2 bond on Wednesday, according to two sources involved in the deal.

Piraeus, Greece's largest lender by assets, priced its new 500-million-euro ($545.1 million) 10-year bond at a yield of 5.5 percent, almost half what it paid in June for a 5-year Tier 2 note.

Initial price guidance for the new issue was around 6 percent. Offers topped 4.0 billion euros with more than 350 investors taking part, one of the sources told Reuters.

Earlier on Wednesday, Greece's 10-year government bond yield fell below 1 percent for the first time ever, buoyed by an improving economy and credit ratings upgrades.

"The reduction of the risk for the country facilitated the Tier 2 issues by Greek banks," said Kostas Boukas, asset management...