GBG Finance Plc a 100% owned subsidiary of Geniki Bank issued on December 19, 2001 a euro 100m subordinated Step up Callable Floating Rate Notes due in 2011. Payments in respect of the Notes were unconditionally and irrevocably guaranteed by Geniki Bank. The issuer of the loan (GBG Finance Plc) will exercise its option, after the consent of the Bank of Greece, to redeem all the Notes on the Interest Payment Date falling in December 2006. The reason for that is that the interest rate of the loan for the first five years period is the floating rate of the market, plus a spread of 1.90% annually, and for the second five years period, the spread rises to 3.40% annually (step up). Given the need for the maintenance of a Subordinated Loan in order to strengthen Geniki?s capital and taking into account that the Bank''s rating from Moody''s has significantly improved after the purchase of the majority of shares by Sociιtι Gιnιrale, the extraordinary General Meeting has approved the Geniki''s BoD''s proposal to issue a new fixed interest rate Subordinated Loan with 10 years duration of an amount up to euro 150m, at market rates plus 50 basis points through a private placement to Sociιtι Gιnιrale, Geniki?s mother company. The net proceeds of the issue will be utilized by the Bank for its general corporate purposes.
More specifically the Long term Bank Deposits were raised to Aa3, the Short term Bank Deposits to P-1 and the subordinated debt rating were upgraded to A1 from A2