Allen & Overy advises on first Greek covered bond programme

25 July, 2008

Allen & Overy has advised Barclays Capital as arranger and lead manager on the establishment of an EUR8 billion covered bond programme by Alpha Bank A.E. This is the first covered bond programme to be established by a Greek entity and the first to be established under the new Greek covered bond legislation.

Under the programme Alpha Bank has simultaneously issued two series of floating rate covered bonds, namely Series 1 EUR1 billion floating rate covered bonds due 2011 and Series 2 EUR1bn floating rate covered bonds due 2013. Each series of covered bonds is listed on the regulated market of the Luxembourg Stock Exchange and have been assigned an “Aaa” rating by Moody’s, an "AAA" rating by Fitch and an "AAA" rating by Standard & Poors.

The programme has been structured in order to permit Alpha Bank to sell loans from its mortgage portfolio to a newly established special purpose vehicle incorporated in England, Alpha Bank Covered Bond plc (the Issuer). Alpha Bank in turn guarantees all payments due under the covered bonds issued by Alpha Covered Bond plc.

Securitisation partner David Shearer, commented: "This covered bond programme is an important step forward for the Greek financial markets. Following the new legislation covered bonds are increasingly being recognised as a valuable means by which Greek institutions can diversify their funding sources. This was an exciting deal to work on and it is another first that Allen & Overy has been involved with in relation to covered bonds.”

A London-based team was lead by securitisation partner David Shearer and assisted by senior associate Sally Onions and associate Jodie Warren. Banking advice was provided by partner Yannis Manuelides, tax advice by partner Chris Harrison and senior associate Amrit Dehal and associate Alice Gamble, derivatives advice by partner Richard Tredgett and associate Robert McGuire and corporate trustee advice by partner Morgan Krone and associate Kate Bartlett.

Allen & Overy also advised BNY Corporate Trustee Services Limited as the trustee and Greek counsel Karatzas & Partners advised the issuer and Alpha Bank.