Fitch Assigns Piraeus HoldCo's Subordinated Tier 2 Notes 'B' Final Rating

Fitch Ratings has assigned Piraeus Financial Holdings S.A.'s (HoldCo) EUR500 million subordinated Tier 2 notes (ISIN: XS2747093321) due 17 April 2034 a final long-term rating of 'B'.

The notes have been issued under HoldCo's EUR25 billion euro medium-term note programme and qualify as Tier 2 regulatory capital.

The rating is in line with the expected rating assigned on 8 January 2024 (see 'Fitch Publishes Piraeus HoldCo's 'BB-' Rating; Rates Upcoming Tier 2 Notes 'B(EXP)' on www.fitchratings.com).

All issuer and other debt ratings are unaffected.

Key Rating Drivers

The notes constitute direct, unsecured, unconditional and subordinated obligations of HoldCo.

The rating of the notes is notched off twice from HoldCo's Viability Rating (VR) of 'bb-' for loss severity to reflect their poor recovery prospects given their junior ranking. No notching is applied for incremental non-performance risk because write-down of the notes will only occur once the point of non-viability is reached, and there is no coupon flexibility before non-viability.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The notes would likely be downgraded if HoldCo's VR is downgraded. In turn, HoldCo's VR is sensitive to change in the VR of Piraeus Bank S.A. (Piraeus), the group's main operating company and core bank.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

The notes would likely be upgraded if HoldCo's VR is upgraded.

Date of Relevant Committee

08 January 2024

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

The VR of Holdco is equalised with the VR of Piraeus.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.