Obligation Piraeus Finance 0% ( XS1156324342 ) en EUR

Piraeus Finance

100 % ⇌

Grece

XS1156324342 ( en EUR )

24/12/2016 - Obligation échue

Prospectus brochure de l'obligation Piraeus Financial XS1156324342 en EUR 0%, échue

100 000 EUR

750 000 000 EUR

Piraeus Bank est une grande banque grecque offrant une gamme de services bancaires de détail, commerciaux et d'investissement, avec une forte présence sur le marché grec et une présence internationale plus limitée.

L'instrument financier analysé est une obligation de type zéro-coupon, identifiée par le code ISIN XS1156324342, émise par Piraeus Financial, l'un des principaux groupes bancaires et financiers de Grèce, dont l'activité est centrale pour l'économie du pays et a traversé des périodes de restructuration significatives. Cette émission, libellée en euros (EUR) et originaire de Grèce, représentait un volume total de 750 000 000 EUR sur le marché obligataire. Caractérisée par un taux d'intérêt de 0%, elle est conçue pour que le rendement de l'investisseur provienne de la différence entre le prix d'achat et la valeur nominale remboursée à maturité, sans paiements d'intérêts périodiques. La taille minimale à l'achat, fixée à 100 000 EUR, indique que cette obligation ciblait des investisseurs institutionnels ou sophistiqués. Arrivée à maturité le 24 décembre 2016, cette obligation a été intégralement remboursée à 100% de sa valeur nominale, comme en témoigne son prix actuel sur le marché, confirmant la bonne exécution de ses engagements par l'émetteur. La "fréquence de paiement 1" dans ce contexte de zéro-coupon fait référence à l'unique paiement du principal qui a eu lieu à l'échéance de l'instrument, signifiant que l'obligation est arrivée à son terme et a été honorée.

BASE PROSPECTUS
PIRAEUS BANK S.A.
(incorporated with limited liability in the Hellenic Republic)
10 billion Global Covered Bond Programme
Under this 10 billion global covered bond programme (the Programme), Piraeus Bank S.A. (the Issuer, Piraeus Bank or, as applicable,
the Bank) may from time to time issue bonds (the Covered Bonds) denominated in any currency agreed between the Issuer and the relevant
Dealer(s) (as defined below). Covered Bonds may be issued in bearer or registered form.
Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its capacity as competent authority under
the Luxembourg Act dated 10 July 2005 (as amended) (the Luxembourg Act) on prospectuses for securities to approve this document as a
base prospectus (the Base Prospectus). The CSSF assumes no responsibility for the economic and financial soundness of the transactions
contemplated by this Base Prospectus or the quality or solvency of the Issuer in accordance with Article 7(7) of the Luxembourg Act.
Application has also been made to the Luxembourg Stock Exchange for Covered Bonds issued under the Programme to be admitted to
trading on the Bourse de Luxembourg, which is the Luxembourg Stock Exchange's regulated market (the Luxembourg Stock Exchange's
regulated market) for the purposes of Directive 2014/65/EU (the Markets in Financial Instruments Directive II) and to be listed on the
Official List of the Luxembourg Stock Exchange. This document comprises a base prospectus for the purposes of Article 5.4 of Directive
2003/71/EC as amended (including, without limitation, the amendments made by Directive 2010/73/EU to the extent that such amendments
have been implemented in a relevant Member State of the European Economic Area) (the Prospectus Directive) but is not a base
prospectus for the purposes of Section 12(a)(2), or any other provision of or rule under, the Securities Act.
References in this Base Prospectus to Covered Bonds being listed and all related references shall mean that such Covered Bonds are
intended to be admitted to trading on the Luxembourg Stock Exchange's regulated market and are intended to be listed on the Official List
of the Luxembourg Stock Exchange's regulated market.
The Programme also permits Covered Bonds to be issued on the basis that they will be admitted to listing, trading and/or quotation by any
competent authority, stock exchange and/or quotation system or to be admitted to listing, trading and/or quotation by such other or further
competent authorities, stock exchanges and/or quotation systems as may be agreed between the Issuer, the Trustee (as defined below), the
Arranger (as defined below) and the relevant Dealer(s). The Issuer may also issue unlisted Covered Bonds and/or Covered Bonds not
admitted to trading on any regulated or unregulated market.
The maximum aggregate nominal amount of all Covered Bonds from time to time outstanding under the Programme will not exceed 10
billion (or its equivalent in other currencies calculated as described herein). The payment of all amounts due in respect of the Covered Bonds
will constitute direct and unconditional obligations of the Issuer, in addition to having recourse to assets forming part of the cover pool (the
Cover Pool).
The Covered Bonds may be issued on a continuing basis to one or more of the Dealers specified under "General Description of the
Programme" and any additional Dealer appointed under the Programme from time to time, which appointment may be for a specific issue or
on an on-going basis (each a Dealer and, together, the Dealers). References in this Base Prospectus to the relevant Dealer shall, in the case
of an issue of Covered Bonds being (or intended to be) subscribed by more than one Dealer, be to the lead manager of such issue and, in
relation to an issue of Covered Bonds subscribed by one Dealer, be to such Dealer.
The price and amount of Covered Bonds to be issued under the Programme will be determined by the Issuer and each relevant Dealer at the
time of issue in accordance with prevailing market conditions. Notice of the aggregate nominal amount of Covered Bonds, interest (if any)
payable in respect of Covered Bonds, and the issue price of Covered Bonds applicable to each Series or Tranche (as defined under "Terms
and Conditions of the Covered Bonds") of Covered Bonds will be set out in a separate document specific to and completing that Series or
Tranche called the final terms (each, a Final Terms) which, with respect to Covered Bonds to be listed on the Official List of the
Luxembourg Stock Exchange, will be delivered to the Luxembourg Stock Exchange on or before the date of issue of such Series or Tranche
of Covered Bonds.
The senior unsecured debt ratings of Piraeus Bank are Caa2 by Moody's Investors Services Cyprus Limited (Moody's), B- by Standard and
Poor's Credit Market Services Italy, S.r.l. (Standard and Poor's) and CC by Fitch Ratings Limited (Fitch). Each of Moody's, Standard and
Poor's, Fitch and DBRS (as defined below) is established in the European Union and is registered under the Regulation (EC) No. 1060/2009
(as amended) (the CRA Regulation). As such, each of Moody's, Standard and Poor's, Fitch, and DBRS (as defined below) is included in
the list of credit rating agencies published by the European Securities and Markets Authority (ESMA) on its website (at
http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the CRA Regulation.
The Covered Bonds issued under the Programme are expected on issue to be assigned a rating of BB- by Fitch and BBB (low) by DBRS
Ratings limited (DBRS), subject to confirmation in the applicable Final Terms. Covered Bonds issued under the Programme may be rated or
unrated as specified in the applicable Final Terms (as defined herein). A credit rating is not a recommendation to buy, sell or hold securities
and may be subject to suspension, change or withdrawal at any time by the assigning rating organisation. Whether or not any credit rating
applied for in relation to any Series of Covered Bonds will be issued by a credit rating agency established in the European Union and
registered under the CRA Regulation will be disclosed in the relevant Final Terms. In general, European regulated investors are restricted
under the CRA Regulation from using a credit rating for regulatory purposes unless such rating is issued by a credit rating agency
established in the EU and registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to
transitional provisions that apply in certain circumstances whilst the registration application is pending. Such general restriction will also
apply in the case of credit ratings issued by non-EU credit rating agencies, unless the relevant credit ratings are endorsed by an EU-
registered credit rating agency or the relevant non-EU rating agency is certified in accordance with the CRA Regulation (and such
endorsement action or certification, as the case may be, has not been withdrawn or suspended).
BD-#31608344-v14

Investing in Covered Bonds issued under the Programme involves certain risks. The principal risk factors that may affect the ability of the
Issuer to fulfil its obligations in respect of the Covered Bonds are discussed under "Risk Factors" below. Please review and consider these
risk factors carefully before you purchase any Covered Bonds.
Arranger
Barclays
Dealers
Barclays
Piraeus Bank S.A.
The date of this Base Prospectus is 17 October 2018.
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2

The Issuer accepts responsibility for the information contained in this Base Prospectus and the Final Terms
for each Tranche of Covered Bonds issued under the Programme and declares that, having taken all
reasonable care to ensure that such is the case, the information contained in this Base Prospectus and the
Final Terms is, to the best of its knowledge, in accordance with the facts and contains no omission likely to
affect its import.
Certain specific information in this Base Prospectus has been sourced from a third party. Such information,
and its respective source, is indicated in each relevant section of this Base Prospectus. The Issuer confirms
that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain
from information published by the relevant source specified, no facts have been omitted which would render
the reproduced information inaccurate or misleading.
Copies of each Final Terms (in the case of Covered Bonds to be admitted to the Luxembourg Stock
Exchange) will be available from the registered office of the Issuer and from the specified office of the
Paying Agents for the time being in London or in Luxembourg at the office of the Luxembourg Listing
Agent.
This Base Prospectus is to be read in conjunction with all documents which are deemed to be incorporated
by reference (see the section entitled "Documents Incorporated by Reference" below). This Base Prospectus
shall be read and construed on the basis that such documents are so incorporated by reference and form part of
this Base Prospectus.
Each Series (as defined herein) of Covered Bonds may be issued without the prior consent of the holders of
any outstanding Covered Bonds (the Covered Bondholders) subject to the terms and conditions set out
herein under "Terms and Conditions of the Covered Bonds" (the Conditions) as completed by the Final
Terms. This Base Prospectus must be read and construed together with any supplements hereto and with any
information incorporated by reference herein and, in relation to any Series of Covered Bonds which is the
subject of Final Terms, must be read and construed together with the relevant Final Terms. All Covered
Bonds will rank pari passu and rateably without any preference or priority among themselves, irrespective of
their Series, except for the timing of repayment of principal and the timing and amount of interest payable.
The Issuer has confirmed to the Arranger and the Dealers named under "General Description of the
Programme" below that this Base Prospectus contains all information which is (in the context of the
Programme, the issue, offering and sale of the Covered Bonds) material; that such information is true and
accurate in all material respects and is not misleading in any material respect; that any opinions, predictions
or intentions expressed herein are honestly held or made and are not misleading in any material respect; that
this Base Prospectus does not omit to state any material fact necessary to make such information, opinions,
predictions or intentions (in the context of the Programme, the issue and the offering and sale of the Covered
Bonds) not misleading in any material respect; and that all proper enquiries have been made to verify the
foregoing.
No person has been authorised to give any information or to make any representation not contained in or not
consistent with this Base Prospectus or any other document entered into in relation to the Programme or any
information supplied by the Issuer or such other information as is in the public domain and, if given or made,
such information or representation should not be relied upon as having been authorised by the Issuer or any
Dealer or the Arranger.
Neither the Dealers nor the Arranger nor any of their respective affiliates have authorised the whole or any
part of this Base Prospectus and none of them makes any representation or warranty or accepts any
responsibility as to the accuracy or completeness of the information contained in this Base Prospectus.
Neither the delivery of this Base Prospectus or any Final Terms nor the offering, sale or delivery of any
Covered Bond shall, in any circumstances, create any implication that the information contained in this Base
Prospectus is true subsequent to the date hereof or the date upon which this Base Prospectus has been most
recently supplemented or that there has been no adverse change, or any event reasonably likely to involve
BD-#31608344-v14
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any adverse change, in the prospects or financial or trading position of the Issuer since the date thereof or, if
later, the date upon which this Base Prospectus has been most recently supplemented, or that any other
information supplied in connection with the Programme is correct at any time subsequent to the date on
which it is supplied or, if different, the date indicated in the document containing the same.
The Arranger shall not be responsible for, any matter which is the subject of, any statement, representation,
warranty or covenant of the Issuer contained in the Covered Bonds or any Transaction Documents, or any
other agreement or document relating to the Covered Bonds or any Transaction Document, or for the
execution, legality, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in
evidence thereof.
The distribution of this Base Prospectus and any Final Terms and the offering, sale and delivery of the
Covered Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Base
Prospectus or any Final Terms comes are required by the Issuer, the Arranger and each of the Dealers to
inform themselves about and to observe any such restrictions. For a description of certain restrictions on
offers, sales and deliveries of Covered Bonds and on the distribution of this Base Prospectus or any Final
Terms and other offering material relating to the Covered Bonds, see "Subscription and Sale". In particular,
Covered Bonds have not been and will not be registered under the United States Securities Act of 1933 (as
amended) (the Securities Act) and are subject to U.S. tax law requirements. Subject to certain exceptions,
Covered Bonds may not be offered, sold or delivered within the United States or to U.S. persons. Covered
Bonds may be offered and sold outside the United States in reliance on Regulation S under the Securities Act
(Regulation S).
Neither this Base Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe for or
purchase any Covered Bonds and should not be considered as a recommendation by the Issuer, the Arranger,
the Dealers or any of them that any recipient of this Base Prospectus or any Final Terms should subscribe for
or purchase any Covered Bonds. Each recipient of this Base Prospectus or any Final Terms shall be taken to
have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer.
The maximum aggregate principal amount of Covered Bonds outstanding at any one time under the
Programme will not exceed 10 billion (and for this purpose, the principal amount outstanding of any
Covered Bonds denominated in another currency shall be converted into euro at the date of the agreement to
issue such Covered Bonds (calculated in accordance with the provisions of the Programme Agreement)).
The maximum aggregate principal amount of Covered Bonds which may be outstanding at any one time
under the Programme may be increased from time to time, subject to compliance with the relevant provisions
of the Programme Agreement as defined under "Subscription and Sale".
In this Base Prospectus, unless otherwise specified, references to a Member State are references to a
Member State of the European Economic Area, references to , EUR or euro are to the single currency
introduced at the start of the third stage of European Economic and Monetary Union (EMU) pursuant to the
Treaty establishing the European Community and references to Swiss francs or CHF are to the lawful
currency for the time being of Switzerland.
In this Base Prospectus, all references to Greece or to the Greek State are to the Hellenic Republic.
This Base Prospectus has been prepared on the basis that any offer of Covered Bonds in any Member State
of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant
Member State) will be made pursuant to an exemption under the Prospectus Directive, as implemented in
that Relevant Member State, from the requirement to publish a prospectus for offers of Covered Bonds.
Accordingly, any person making, or intending to make, an offer to the public of Covered Bonds in that
Relevant Member State may only do so in circumstances in which no obligation arises for the Issuer, the
Arranger or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or
supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such
offer. None of the Issuer, the Arranger or any Dealer has authorised, nor do any of them authorise, the
BD-#31608344-v14
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making of any offer of Covered Bonds in circumstances in which an obligation arises for the Issuer, the
Arranger or any Dealer to publish or supplement a prospectus for such offer.
In connection with the issue of any Series of Covered Bonds, the Dealer or Dealers (if any) named as
the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the
applicable Final Terms may over allot Covered Bonds or effect transactions with a view to supporting
the market price of the Covered Bonds at a level higher than that which might otherwise prevail.
However, there is no assurance that the Stabilising Manager(s) (or persons acting on behalf of any
Stabilising Manager(s)) will undertake stabilisation action. Any stabilisation action may begin on or
after the date on which adequate public disclosure of the terms of the offer of the relevant Series of
Covered Bonds is made and, if begun, may be ended at any time, but it must end no later than the
earlier of 30 days after the issue date of the relevant Tranche of Covered Bonds and 60 days after the
date of the allotment of the relevant Tranche of Covered Bonds. Any stabilisation or over allotment
must be conducted by the relevant Stabilising Manager(s) (or person(s) acting on behalf of any
Stabilising Manager(s)) in accordance with all applicable laws and rules.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS The Covered Bonds are not intended to
be offered, sold or otherwise made available to and, with effect from such date, should not be offered, sold
or otherwise made available to any retail investor in the European Economic Area (EEA). For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (MiFID II); or (ii) a customer within the meaning of Directive
2002/92/EC (as amended or superseded, IMD), where that customer would not qualify as a professional
client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document
required by Regulation (EU) No 1286/2014 (as amended, the PRIIPS Regulation) for offering or selling the
Covered Bonds or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Covered Bonds or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPS Regulation.
An investment in the Covered Bonds is not an equivalent to an investment in a bank deposit. Although
an investment in Covered Bonds may give rise to higher yields than a bank deposit placed with the
Bank or with any other investment firm in the Group (as defined below), an investment in Covered
Bonds carries risks which are very different from the risk profile of such a deposit. The Covered
Bonds are expected to have greater liquidity than a bank deposit since bank deposits are generally not
transferable. However, Covered Bonds may have no established trading market when issued, and one
may never develop.
Investments in Covered Bonds do not benefit from any protection provided pursuant to Directive
2014/49/EU of the European Parliament and of the Council on deposit guarantee schemes or any
national implementing measures implementing this Directive in any jurisdiction. Therefore, if the
relevant Issuer becomes insolvent or defaults on its obligations, investors investing in the Covered
Bonds in a worst case scenario could lose their entire investment.
Amounts payable under the Covered Bonds may be calculated by reference to one or more
"benchmarks" for the purposes of Regulation (EU) No. 2016/1011 of the European Parliament and of
the Council of 8 June 2016 (the "Benchmarks Regulation") including: EURIBOR, which is provided
by the European Money Markets Institute, and LIBOR, which is provided by ICE Benchmark
Administration. In this case, a statement will be included in the applicable Final Terms as to whether
or not the relevant administrator of the "benchmark" is included in ESMA's register of
administrators under Article 36 of the Benchmarks Regulation. As of the date hereof, ICE Benchmark
Administration is included in the register of administrators and benchmarks maintained by ESMA
pursuant to Article 36 of the Benchmark Regulation. As at the date hereof, the European Money
Markets Institute is not in the register of administrators and benchmarks established and maintained
BD-#31608344-v14
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by ESMA pursuant to Article 36 of the Benchmark Regulation. As far as the Issuer is aware,
transitional provisions in Article 51 of the Benchmark Regulation apply, such that EMMI is not
currently required to appear in the register of administrators and benchmarks. The registration
status of any administrator under the Benchmarks Regulation is a matter of public record and, save
where required by applicable law, the Issuer does not intend to update the applicable Final Terms to
reflect any change in the registration status of the administrator.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET The Final Terms in respect of any
Covered Bonds will include a legend entitled "MiFID II product governance" which will outline the
target market assessment in respect of the Covered Bonds and which channels for distribution of the
Covered Bonds are appropriate. Any person subsequently offering, selling or recommending the
Covered Bonds (a "distributor") should take into consideration the target market assessment;
however, a distributor subject to MiFID II is responsible for undertaking its own target market
assessment in respect of the Covered Bonds (by either adopting or refining the target market
assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID
Product Governance rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance
Rules"), any Dealer subscribing for any Covered Bonds is a manufacturer in respect of such Covered
Bonds, but otherwise neither Barclays Bank plc, as arranger, nor the Dealers nor any of their
respective affiliates will be a manufacturer for the purpose of the MiFID Product Governance Rules.
BD-#31608344-v14
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Contents
Clause
Page
RISK FACTORS ..............................................................................................................................................................8
DOCUMENTS INCORPORATED BY REFERENCE...............................................................................................66
GENERAL DESCRIPTION OF THE PROGRAMME..............................................................................................68
TERMS AND CONDITIONS OF THE COVERED BONDS ..................................................................................103
FORMS OF THE COVERED BONDS ......................................................................................................................142
FORM OF FINAL TERMS.........................................................................................................................................145
USE OF PROCEEDS ...................................................................................................................................................155
INSOLVENCY OF THE ISSUER ..............................................................................................................................156
OVERVIEW OF THE GREEK COVERED BOND LEGISLATION ....................................................................157
PIRAEUS BANK AND THE PIRAEUS BANK GROUP.........................................................................................161
ALTERNATIVE PERFORMANCE MEASURES ...................................................................................................202
THE BANKING SECTOR AND THE ECONOMIC CRISIS IN GREECE ..........................................................203
REGULATION AND SUPERVISION OF BANKS IN GREECE...........................................................................223
THE MORTGAGE AND HOUSING MARKET IN GREECE ...............................................................................239
DESCRIPTION OF THE TRANSACTION DOCUMENTS ...................................................................................248
TAXATION...................................................................................................................................................................266
SUBSCRIPTION AND SALE .....................................................................................................................................269
GENERAL INFORMATION......................................................................................................................................273
INDEX ...........................................................................................................................................................................278
BD-#31608344-v14
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RISK FACTORS
In purchasing Covered Bonds, investors assume the risk that Piraeus Bank may become insolvent or
otherwise be unable to make all payments due in respect of the Covered Bonds. There is a wide range of
factors which individually or together could result in Piraeus Bank becoming unable to make all payments
due in respect of the Covered Bonds. It is not possible to identify all such risks or to determine which risks
are most likely to occur, as Piraeus Bank may not be aware of all relevant risks and certain risks which it
currently deems not to be material may become material as a result of the occurrence of events outside
Piraeus Bank's control. Piraeus Bank has identified in this Base Prospectus a number of factors which could
materially adversely affect its businesses and ability to make payments due under the Covered Bonds.
In addition, factors which are material for the purpose of assessing the market risks associated with Covered
Bonds issued under the Programme are also described below.
Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus
and reach their own views prior to making any investment decision.
THE PURCHASE OF COVERED BONDS MAY INVOLVE SUBSTANTIAL RISKS AND MAY BE SUITABLE
ONLY FOR INVESTORS WHO HAVE THE KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS NECESSARY TO ENABLE THEM TO EVALUATE THE RISKS AND THE MERITS
OF AN INVESTMENT IN THE COVERED BONDS. PRIOR TO MAKING AN INVESTMENT DECISION,
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY, IN LIGHT OF THEIR OWN
FINANCIAL CIRCUMSTANCES AND INVESTMENT OBJECTIVES, (I) ALL THE INFORMATION SET
FORTH IN THIS BASE PROSPECTUS AND, IN PARTICULAR, THE CONSIDERATIONS SET FORTH
BELOW AND (II) ALL THE INFORMATION SET FORTH IN THE APPLICABLE FINAL TERMS.
PROSPECTIVE INVESTORS SHOULD MAKE SUCH ENQUIRIES AS THEY DEEM NECESSARY
WITHOUT RELYING ON THE ISSUER, THE ARRANGER OR ANY DEALER.
CERTAIN ISSUES OF COVERED BONDS INVOLVE A HIGH DEGREE OF RISK AND POTENTIAL
INVESTORS SHOULD BE PREPARED TO SUSTAIN A LOSS OF ALL OR PART OF THEIR
INVESTMENT.
Factors that may affect the Issuer's ability to fulfil its obligations under Covered Bonds issued under
the Programme
The Covered Bonds will be obligations of the Issuer only
The Covered Bonds will be solely obligations of the Issuer and will not be obligations of, or guaranteed by,
any of the Trustee, the Asset Monitor, the Account Bank, the Agents, the Hedging Counterparties, the
Arranger, the Dealers or the Listing Agent. No liability whatsoever in respect of any failure by the Issuer to
pay any amount due under the Covered Bonds shall be accepted by any of the Trustee, the Asset Monitor, the
Account Bank, the Agents, the Hedging Counterparties, the Arranger, the Dealers or the Listing Agent, any
company in the same group of companies as such entities or any other party to the transaction documents
relating to the Programme.
Maintenance of the Cover Pool
Pursuant to the Greek Covered Bond Legislation, the Cover Pool is subject to the Statutory Tests set out in the
Secondary Covered Bond Legislation. Failure of the Issuer to take immediate remedial action to cure any one
of these tests will result in the Issuer not being able to issue further Covered Bonds and any failure to satisfy
the Statutory Tests may have an adverse effect on the ability of the Issuer to meet its payment obligations in
respect of the Covered Bonds.
Pursuant to the Servicing and Cash Management Deed, after the occurrence of an Issuer Event the Cover Pool
is also subject to the Amortisation Test. The Amortisation Test is intended to ensure that the Cover Pool
Assets are sufficient to meet the obligations under all Covered Bonds outstanding together with senior
expenses that rank in priority to or pari passu with amounts due on the Covered Bonds. Failure to satisfy the
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Amortisation Test on any Monthly Calculation Date following an Issuer Event results in the Issuer being
required immediately to treat all Covered Bonds of all Series as Pass-Through Covered Bonds and,
accordingly, to redeem them at their Principal Amount Outstanding on a pro rata basis (to the extent it has
Covered Bonds Available Funds available for such purpose and in accordance with the Pre-Event of Default
Priority of Payments), as described further under "Risks related to the Covered Bonds Final Maturity and
extendable obligations under the Covered Bonds".
Factors that may affect the realisable value of the Cover Pool or any part thereof
The realisable value of Loans and their Related Security comprised in the Cover Pool may be reduced by:
(a)
default by borrowers (each borrower being, in respect of a Loan Asset, the individual specified as
such in the relevant mortgage terms together with each individual (if any) who assumes from time to
time an obligation to repay such Loan Asset (the Borrower)) in payment of amounts due on their
Loans;
(b)
changes to the lending criteria of the Issuer; and
(c)
possible regulatory changes by the regulatory authorities.
Each of these factors is considered in more detail below.
Inability of Borrowers to pay, or default by Borrowers in paying, amounts due on their Loans
Borrowers may default on their obligations under the Loans in the Cover Pool. Defaults may occur for a
variety of reasons. The Loans are affected by credit, liquidity and interest rate risks. Various factors influence
mortgage delinquency rates, prepayment rates, repossession frequency and the ultimate payment of interest
and principal, such as changes in the national or international economic climate, regional economic or
housing conditions, changes in tax laws, interest rates, inflation, the availability of financing, yields on
alternative investments, political developments and government policies. Other factors in Borrowers'
individual, personal or financial circumstances may affect the ability of Borrowers to repay the Loans. Loss
of earnings, illness, divorce and other similar factors may lead to an increase in delinquencies by Borrowers,
and could ultimately have an adverse impact on the ability of Borrowers to repay the Loans. In addition, it
should be noted that some of the Loans in the Cover Pool may have been delinquent (by virtue of a breach by
the Borrower of payment or non-payment obligations) in the past and are either re-performing by virtue of
the Borrower becoming current on its payments or curing the non-payment breach or by virtue of a
restructuring of a Loan. Such Borrowers may be more likely to enter delinquency again as compared to other
Borrowers. Finally, the ability of a Borrower to sell a property given as security for a Loan at a price
sufficient to repay the amounts outstanding under that Loan will depend upon a number of factors, including
the availability of buyers for that property, the value of that property and property values in general at the
time.
Changes to the lending criteria of the Issuer
Each of the Loans originated by the Issuer will have been originated in accordance with its lending criteria at
the time of origination. It is expected that the Issuer's lending criteria will generally consider, inter alia, the
type of property, term of loan, age of applicant, the loan-to-value ratio, status of applicant and credit history.
The Issuer retains the right to revise its lending criteria from time to time but would do so only to the extent
that such a change would be acceptable to a reasonable, prudent mortgage lender. If the lending criteria
change in a manner that affects the creditworthiness of the Loans, that may lead to increased defaults by
Borrowers and may affect the realisable value of the Cover Pool, or part thereof, and the ability of the Issuer
to make payments under the Covered Bonds.
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Certain Loans not originated by Issuer
It should be noted that a significant proportion of the Loans included by the Issuer into the Cover Pool at any
time may not have been originated by the Issuer in the case of Loans that have been, or will in the future be,
acquired by the Issuer pursuant to, or in consequence of, the Acquisitions (as defined and described in more
detail under "Piraeus Bank and the Piraeus Bank Group - Overview of Piraeus Bank and the Piraeus Bank
Group"), or otherwise acquired by the Issuer. In respect of such acquired Loans, there can be no assurance
that the lending criteria of the relevant originating entity were comparable with (and not materially inferior
to) those of the Issuer, or were not effectively applied by the originating entity, and so the asset quality of
Loans not originated by the Issuer may be materially worse than that of Loans that were originated by the
Issuer. This may result in the deterioration in the performance and value of the Cover Pool Assets. It may
also make it harder for the Statutory Tests to be met.
In addition, under the Servicing and Cash Management Deed, the Issuer has made and will make certain
representations and warranties regarding itself and the Loan Assets. The representations and warranties that
the Issuer is required to make about Loans not originated by it are materially less extensive than the
representations and warranties it is required to make about Loans that it has originated. Accordingly, there is
potentially less assurance as to the quality, performance, enforceability and value of Loans not originated by
the Issuer that are included in the Cover Pool, and this may result in the deterioration in the performance and
value of the Cover Pool Assets.
Risks relating to Loans denominated in Swiss francs
Loans denominated in Swiss francs may be included in the Cover Pool, subject to notification to the Rating
Agencies. Following such inclusion, the Issuer would be exposed to certain currency and other risks and the
Issuer is required to enter into appropriate Hedging Agreements in connection with these Swiss francs Loans.
Pursuant to these Hedging Agreements, amounts received by the Issuer in respect of Loans denominated in
Swiss francs will be paid to the relevant Hedging Counterparty. Amounts received by the Issuer from the
relevant Hedging Counterparty will form Covered Bonds Available Funds and will be applied by the Issuer
in accordance with the applicable Priorities of Payments.
Borrower inability to repay due to CHF/EUR exchange rate fluctuations
Borrowers of CHF Loans choosing to pay their Loans in EUR without CHF collar protection may become
unable to repay the Loans in the event of wide fluctuations in CHF/EUR currency exchange rates and as a
result may default. As a result of such defaults the Issuer may not receive payments it would otherwise be
entitled to from such Borrowers.
If there are insufficient funds available as a result of such defaults, then the Issuer may not be able, after
making the payments to be made in priority thereto, to pay, in full or at all, amounts of interest and principal
due to holders of the Covered Bonds. In this situation, there may not be sufficient funds to redeem the
Covered Bonds on or prior to the Final Maturity Date.
Currency exchange rates cannot be predicted and are influenced by a wide variety of economic, social and
other factors.
In this respect it should be noted that due to wide fluctuations in CHF/EUR currency exchange rates in recent
years, borrowers of Swiss franc-denominated mortgage loans have filed lawsuits before Greek courts seeking
the redenomination of their mortgage loan from CHF to EUR based on the CHF/EUR currency exchange
rate applicable at the time of the loan disbursement. There have been a number of decisions by Greek courts
of first instance in cases brought by individual borrowers (not a class action), which held that the provision
of a mortgage loan denominated in CHF (and originated by a Greek credit institution) under which payments
on the loan by the borrower were to be made in EUR based on the CHF/EUR exchange rate applicable on the
date of payment, is "abusive" and thus null and void, and that payments in EUR should be calculated on the
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