Greek fixed income MONITOR

GREEK FIXED INCOME MONITOR:
GOVERNMENT BOND INDEX RECORDING NEW HIGH
MAY 2016
Ilias Lekkos
Veni Arakelian
Dimitria Rotsika
Haris Giannakidis
ECONOMIC ANALYSIS & INVESTMENT STRATEGY
Piraeus Bank Government Bond Index: {PBGGGSBI Index<GO>}
Weighted Average Yield: {PBGGGWAY Index<GO>}
Piraeus Bank Government Bond Index : {PBGGGCBI Index<GO>}
Weighted Average Yield : {PBGGIWAY Index<GO>}

CONTENTS
2
Latest Developments in the Greek Bond Market
Greek Government Bonds Interest Rate Curve Estimation
Piraeus Bank Greek Government Bond Index
Piraeus Bank Greek Corporate Bond Index

LOWER ECONOMIC UNCERTAINTY AND GAINS IN THE GOVERNMENT BOND MARKET…
3Source: Piraeus Bank Research, Bloomberg
• A noteworthy upward trend was recorded by the Government Bond Index in May that
reached a record high of 401 points. Similar levels have not been recorded again
since the construction of the index. Furthermore, for the first time, the index recorded
a weighted average yield of 7.1%, which is well below its level one month ago. The
agreement for the completion on the Greek program evaluation and the three-point
plan for debt relief, gave further impetus to the upturn of the index which had
already started in mid-March.
• Although market valuations of the government bond market seem to have
discounted the positive developments in the program evaluation despite
considerable delays, additional references concerning the Greek debt led to further
gains. The reduction of economic uncertainty and the imminent restoration of
financing for the Greek economy had a significant impact on the markets of both
government and corporate bonds. Specifically, in May the Government Bond Index
recorded an increase of 8.33% to 397 points. Since the beginning of the year, the
index’s value has increased by 10.1%.
• One of the main driving factors that is anticipated to further support the positive
dynamics observed in May, is the ECB's stance with regard to the decision on waiver
lift of Greek government bonds, which is expected to take place before the end of
June. Under the optimistic scenario of relatively low political risk and given the loose
monetary policy followed by the ECB, yields on Greek government bonds may decline
far more than those of European bond issues which are already priced at very low
levels (Portugal, Spain, Italy).
Government Bond Index
Indices Performance
0
50
100
150
200
250
300
350
400
450
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
0 5 10 15
Piraeus Bank Corporate ex
Financials Bond Index
Piraeus Bank Government Bond
Index
Bloomberg Corporate High Yield
Bond Index
Bloomberg Government Bond
Index
MoM

…WITH POSITIVE RETURNS FOR CORPORATE BONDS AS WELL.
• A six-month high was also recorded for the Corporate Bond Index with substantial
gains for almost all of the corporate issues. Specifically, the index reached 113.8
points in late May, a gain of 4% compared to the same period of the previous month.
However, since the beginning of the year the value of the Corporate Bond Index has
risen only by 1% in contrast to the European high-yield bonds market, which has
realized an increase of 3.82%.
• In June, TITAN announced a new bond issue worth € 250 million with 5 Year maturity.
The proceeds of this issue are to be used to refinance the bond with coupon of 8.75%
that matures on 19/01/2017. This move aims to reduce the company's borrowing
costs by taking advantage of better valuations in the corporate bond market.
• Despite the positive assessment of markets for the majority of the bonds included in
the corporate bond index, following the agreement on May 24 and the decrease in
uncertainty about the liquidity of the Greek financing system, comparatively higher
profits were recorded for the PPC and ELPE bonds due to the developments in oil
prices.
• According to ELPE’s published results for the first quarter of 2016, the price
stabilization of oil led to positive refining margins boosted by the inelasticity of
demand for derivative products (e.g. gasoline). Similarly, despite the decrease of 5.6%
in electricity demand in the first quarter of 2016 and the decrease of PPC sales by
10.1% (aggravated by the fall in the company's share of the retail market from 97.1%
to 94.1%) the reduction of energy costs due to favorable international conditions led
to an increase in profits (before taxes) of 58.6%.
Corporate Bond Index
Corporate Bond Index (MoM Returns)
90
95
100
105
110
115
120
125
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
-15
-10
-5
0
5
10
15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16

GREEK CORPORATE BOND PERFORMANCE
• The two worst monthly performances were recorded by the following bonds:
TITAN (-0.72%) with maturity in 2017
OTE (-0.38% ) maturing at end-2016
• The three best performance were recorded by the following bond issues:
PPC (13.13%) maturing in 2019
ELPE (11.72%) maturing in 2019
PPC (10.66%) maturing in 2017
• The maturing OTE bond on May 20, 2016 led to the adjustment of the Corporate
Bond Index. Currently, the Corporate Bond Index consists of 16 bonds issues.
• There were coupon payments for both PPC bonds on May 1, 2016, for the ELPE
bond on May 10, 2016 and for the bonds of INTRALOT, MOTOR OIL and
FRIGOGLASS on May 15, 2016.
Monthly Performance of Corporate Bond Index Members
-2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0
COCA-COLA (2020)
OTE (2018)
ELPE (2017)
INTRALOT FINANCE
FRIGOGLASS
COCA-COLA (2016)
TITAN (2017)
PPC (2019)
PPC (2017)
INTRALOT CAPITAL
MOTOROIL
TITAN (2019)
ELPE (2019)
OTE (2020)
OTE (2019)
COCA-COLA (2024)

DEVIATIONS BETWEEN MACROECONOMIC DATA RELEASES AND BOND VALUATIONS…
• It is important to note that in May we observed deviations between the
macroeconomic data for the Greek economy and bond market valuations.
For instance, the Economic Sentiment Indicator (ESI) remains at similar
levels to those of the previous month as opposed to the Corporate Bond
Index which exhibited a strong positive trend after the agreement on the
evaluation of the Greek program. Specifically, while the Corporate Bond
Index increased by 4%, the ESI fell from 90.3 points in April to 89.7 points
in late May, signaling a marginal slowdown in the economic climate.
Furthermore, indicative of the deviations between market valuations and
macroeconomic data is the marginal downward revision of the GDP of the
Greek economy, which declined by 1.4% on a YoY basis in the first quarter
of 2016.
• Despite a marginal slowdown in macroeconomic data and expectations
about the economy, credit risk is significantly reduced with the 5-year CDS
falling by 273 basis points from its level of 1241 basis points in late April.
From the projection of the effect of credit risk on the performance of the
Government Bond Index weighted yield, we observe a pronounced
downward movement in realized yields relative to our estimates.
Specifically, the deviation of the statistical model estimate relative to the
actual yield is around 100 basis points, reflecting the influence of other
factors such as the ECB's stance on lifting the waiver for government bond
issues on market valuations.
Correlation of Corporate Bond Index & ESI
Government Bonds Yield to Maturity Model Estimate
70
75
80
85
90
95
100
105
110
100
105
110
115
120
125
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Corporate Bond Index (LHS) ESI (RHS)
6
7
8
9
10
11
12
13
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Government Bond Index Yield Model Estimate (CDS 5Y SR in USD )

… DESPITE THE REDUCED COST OF SHORT-TERM DEBT…
• From the assessment of the estimated interest rate curve of Greek government bonds we observe a significant downward shift in short–term interest rates resulting from
the change in bond market valuations. At the short end of the curve, we observe larger declines in interest rates relative to those at the long end of the curve as the
market strengthened its expectations for inflation rate increases over long-term investment horizons. Due to the improvement in expectations for the Greek economy, at
the end of May, 3-Year interest rates recorded a fall of around 148 basis points (bps). Similarly, interest rates on medium-term maturities moved downward by 118 bps for
the 5-Year tenors and 96 bps for issues with maturity of 10 years. Bond issues with maturity greater than 20 years exhibited smaller but significant reductions in the range
of 17 (for the 26-Year tenor) and 55 (20-Year tenor) bps.
• The estimation of the one month forward rate curve, advocates for a flat yield curve without significant changes throughout the interest rate curve. In particular, short-
term (2-3 years) forward rates for the next month are expected to be close to 7.33%. Similarly, regarding market expectations for the mid-section of the curve, no
significant differences are noted relative to current levels with forward rates for the medium-term maturities ranging between 6.9% (10-Year) and 7.2% (5-Year). Compared
with market expectations in April, short and medium-term forward rates recorded a significant downward shift, whereas forward rates for the longest maturities (over 17
years) increased by an average of 85 bps compared to April levels.
Estimated Forward Rate CurveEstimated Interest Rate Curve
-200
-180
-160
-140
-120
-100
-80
-60
-40
-20
0
6.00
6.50
7.00
7.50
8.00
8.50
9.00
2 4 5 7 9 10 12 13 15 17 18 20 22 23 25
bpspercentage points
Maturity (in years)
Change (RHS) Spot Rates 31/05/2016 Spot Rates 28/04/2016
-150
-100
-50
0
50
100
150
200
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2 4 5 7 9 10 12 13 15 17 18 20 22 23 25
bpspercentage points
Maturity (in years)
Change (RHS) Forward Rates 31/05/2016 Forward Rates 28/04/2016

…MAY RESULT IN PREMATURE FUTURE ECONOMIC EXPECTATIONS.
• In May, the slope of the yield curve returned to positive territory after a period of two months, which was characterized by high uncertainty in financing and
liquidity of the country. In particular, in May the 10-Year / 3-Year term spread ranged between -166 and 60 basis points. The reversal of the negative slope of
the yield curve was driven by the strong decline in interest rates of short-term maturities relative to their high levels during the previous period. However, a
temporary reversal of the slope of the yield curve was also recorded in March, which was not sustained for a reasonable time span. Since the 30-day moving
average for the 10-Year / 3-Year spread is a more reliable reversal signal of bond market expectations and given that its current level remains in negative
territory at -63 bps, it is still too early to make any tangible assessment about the future economic prospects of Greece.
• The improvement in bond market conditions due to lower uncertainty led to a fall in volatility in the yields of 10-Year and 3-Year bonds in late May. Specifically,
the volatility of the 3-Year bond fell 11 points from 108.7 points at the end of the previous month. A decline was also recorded for the volatility index of 10-Year
bond, which fell 7 points, reaching the level of 28.61 points.
Bond Yield Annualized VolatilityTerm Spread (10 Year / 3 Year)
-300
-250
-200
-150
-100
-50
0
50
100
150
200
250
2-Mar-16
9-Mar-16
16-Mar-16
23-Mar-16
30-Mar-16
6-Apr-16
13-Apr-16
20-Apr-16
27-Apr-16
4-May-16
11-May-16
18-May-16
25-May-16
basispoints
Term Spread (bps) 30 day MA
0
20
40
60
80
100
120
140
2-Mar-16
9-Mar-16
16-Mar-16
23-Mar-16
30-Mar-16
6-Apr-16
13-Apr-16
20-Apr-16
27-Apr-16
4-May-16
11-May-16
18-May-16
25-May-16
percentagepoints
Ann. Vol 3Y Ann. Vol 10Y

PIRAEUS BANK GREEK GOVERNMENT BOND INDEX
• The lowest price in May for the index was 365.35, while the highest price was 401.34.
• The value of the Greek Government Bond Index on May 31st was 8.33% higher than
in the previous month. The index’s average (MoM) return in the same month was
9.23%.
• From the analysis of historical data we observe that the index MoM return at the end
of May was higher than 65% of realized past returns. Returns, lower or equal to the
level of 8.33% were observed on average only 20 days during a month.
*(Returns with low frequency of occurrence have a smaller probability of being realized in the near future).
MoM Return HistogramIndex Evolution May 2016 (Base Date: 9/3/12=100)
31-May
Members 22
Market Capitalization (EUR bn.) 35.70
Weighted Average Yield 7.27
Weighted Average Coupon 3.22
Weighted Average Maturity 13.51
Weighted Average Duration 9.41
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
150
200
250
300
350
400
450
1-Apr-16
8-Apr-16
15-Apr-16
22-Apr-16
29-Apr-16
6-May-16
13-May-16
20-May-16
27-May-16
Price (LHS) Yield (RHS)
0%
2%
4%
6%
8%
10%
12%
-39 -34 -29 -24 -19 -14 -9 -3 2 7 12 17 22 28 33 38 43 48 53
Frequency
MoM Returns (in percentage points)

PIRAEUS BANK GREEK GOVERNMENT BOND INDEX
Index Composition– May 2016
Name
Issue Amount
(€ bn)
Amount
Outstanding
(€ bn)
Currency Coupon Coupon Type
Coupon
Frequency
Next Coupon
Payment
Issuance Date Maturity
Credit Rating
(Standard &
Poor's)
Last Price – 31
May
Yield - 31
May
Hellenic Republic Government Bond 2.97 1.79 € 3.000 Κλιμακωτό Ετήσια 24/02/17 24/02/2012 24/02/2023 B- 79.3 7.4
Hellenic Republic Government Bond 4.03 4.03 € 4.750 Σταθερό Ετήσια 17/04/17 10/04/2014 17/04/2019 B- 93.4 7.4
Hellenic Republic Government Bond 2.09 2.09 € 3.375 Σταθερό Ετήσια 17/07/16 10/07/2014 17/07/2017 B- 96.2 7.0

PIRAEUS BANK GREEK CORPORATE BOND INDEX
• The lowest price in May for the index was 109.4 while the highest price was 113.78.
• The value of the Greek Corporate Bond Index on May 31st had increased by 4%
compared to the previous month. Moreover, the index’s average (MoM) return in the
same month was 1.81%.
• From the analysis of historical data we observe that the index MoM return at the end
of May was higher than 95% of realized past returns. Returns, lower or equal to the
level of 4% were observed on average 29 days during a month.
*( Returns with low frequency of occurrence have a smaller probability of being realized in the near future).
MoM Return HistogramIndex Evolution May 2016 (Base Date : 02/01/13=100)
31-May
Members 16
Market Capitalization (EUR bn) 6.67
Weighted Average Yield 4.85
Weighted Average Coupon 5.19
Weighted Average Maturity 3.19
Weighted Average Duration 2.80
3.0
4.0
5.0
6.0
7.0
8.0
9.0
107.0
108.0
109.0
110.0
111.0
112.0
113.0
114.0
115.0
2-Mar-16
9-Mar-16
16-Mar-16
23-Mar-16
30-Mar-16
6-Apr-16
13-Apr-16
20-Apr-16
27-Apr-16
4-May-16
11-May-16
18-May-16
25-May-16
Price (LHS) Yield (RHS)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Frequency
MoM Returns (in percentage points)

PIRAEUS BANK GREEK CORPORATE BOND INDEX
Index Composition– May 2016
Company Name
Issue
Amount
(€ bn)
Amount
Outstanding
(€ bn)
Currency Coupon Coupon Type
Coupon
Frequency
Next Coupon
Payment
Issuance
Date
Maturity
Credit Rating
(Standard &
Poor's)
Last Price – 31
May
Yield - 31
May
COCA-COLA HBC FINANCE BV 800.00 800.00 € 2.375 Σταθερός Ετήσια 18/06/16 06/10/2013 06/18/2020 BBB+ 106.70 0.58
OTE PLC 700.00 650.00 € 7.875 Σταθερός Εξαμηνιαία 07/08/16 01/29/2013 02/07/2018 B+ 108.10 2.90
HELLENIC PETROLEUM FINAN 500.00 500.00 € 8.000 Σταθερός Εξαμηνιαία 10/11/16 04/29/2013 05/10/2017 102.79 4.92
INTRALOT FINANCE LUXEMBU 325.00 325.00 € 9.750 Σταθερός Εξαμηνιαία 15/08/16 08/01/2013 08/15/2018 B 106.59 1.20
FRIGOGLASS FINANCE BV 250.00 250.00 € 8.250 Σταθερός Εξαμηνιαία 15/11/16 05/13/2013 05/15/2018 CCC+ 62.99 36.29
COCA-COLA HBC FINANCE BV 600.00 385.38 € 4.250 Σταθερός Ετήσια 16/11/16 11/09/2009 11/16/2016 BBB+ 101.89 0.11
TITAN GLOBAL FINANCE PLC 200.00 197.00 € 8.750 Σταθερός Εξαμηνιαία 19/07/16 12/17/2012 01/19/2017 BB 104.41 1.67
PPC FINANCE PLC* 500.00 500.00 € 5.500 Σταθερός Εξαμηνιαία 01/11/16 04/30/2014 05/01/2019 CCC- 86.08 11.23
PPC FINANCE PLC* 200.00 200.00 € 4.750 Σταθερός Εξαμηνιαία 01/11/16 04/30/2014 05/01/2017 CCC- 96.77 8.49
INTRALOT CAPITAL LUX* 250.00 250.00 € 6.000 Σταθερός Εξαμηνιαία 15/11/16 04/30/2014 05/15/2021 B 92.88 7.76
MOTOR OIL FINANCE PLC* 350.00 350.00 € 5.125 Σταθερός Εξαμηνιαία 15/11/16 05/15/2014 05/15/2019 102.35 3.86
TITAN GLOBAL FINANCE PLC* 300.00 287.17 € 4.250 Σταθερός Εξαμηνιαία 10/07/16 07/03/2014 07/10/2019 BB 102.27 3.47
HELLENIC PETROLEUM FINANCE* 325.00 325.00 € 5.250 Σταθερός Εξαμηνιαία 04/07/16 06/25/2014 07/04/2019 99.14 5.56
OTE PLC* 700.00 700.00 € 3.500 Σταθερός Ετήσια 09/07/16 07/07/2014 07/09/2020 B+ 100.82 3.28
OTE PLC** 350.00 350.00 € 4.375 Σταθερός Ετήσια 02/12/16 02/12/15 02/12/19 B+ 103.51 3.29
COCA-COLA HBC FINANCE BV*** 600.00 600.00 € 1.875 Σταθερός Ετήσια 11/11/16 10/03/16 11/11/24 BBB 103.95 1.38
* 2014 Issues
** 2015 Issues
*** 2016 Issues

FIXED INCOME MONITOR
13
Disclaimer: This document is produced by the Economic Research & Investment Strategy Department of Piraeus Bank (hereinafter “the Bank”), which is supervised by the Bank of Greece and is sent or provided
to third parties, without any obligation of its author. This document or any part of it should not be duplicated in any way without the prior written consent of its author.
The information or opinions included in this document are addressed to existing or potential clients in a general manner, without taking into account the particular circumstances, the investment objectives, the
financial ability, the experience and/or knowledge of the potential recipients of this document and, as a result, they do not constitute or should not be considered neither as a solicitation or offer for the
conduct of transactions in financial instruments or currencies nor as a recommendation or advice for decision making in relation to those. Taking into account the aforementioned, the recipient of the
information contained in this document should proceed with his/her own research, analysis, and confirmation of the information which is included in this document and seek for independent and professional
legal, tax and investment advice, before proceeding with any investment decision making.
The information depicted in this document is relied on sources that the Bank considers to be reliable and is provided on an “as is” basis, however, the Bank cannot warrant as to their accuracy and
completeness. The opinions and estimates herein are related to the trend of the local and international financial markets at the indicated date (prices at closing time) and are subject to changes without any
prior notice. Notwithstanding the above, the Bank might include in this document investment researches, which have been conducted by third persons. In this case, the Bank does not modify those researches,
but it presents them on an “as is” basis, therefore, no responsibility is assumed in relation to the content of the aforementioned investment researches. The Bank is under no duty to update the information
contained in this document. Considering the above, the Bank, the members of its Board of Directors and the relevant persons assume no responsibility for the information included in the present document
and/or for the outcome of any investment decisions made according to such information.
Piraeus Bank Group is an organization with a significant presence in the Greek market and an increasing one in the international markets providing a wide range of investment services. In the context of
investment services offered by the Bank and/or any other Piraeus Group companies in general, there might be cases whereby conflict of interests may arise in relation to the information provided herein.
Reference should be made to the fact that the Bank, the relevant persons and/or other Piraeus Group companies indicatively:
a. Are not subject to any prohibition in relation to trading on own account or in the course of providing portfolio management services prior to the publication of this document or the acquisition of any shares
prior to any public offering or the acquisition of any other securities.
b. May offer upon remuneration investment banking services to issuers for whom this document may contain information.
c. May participate to the issuers’ share capital or acquire other securities issued by the aforementioned issuers or attract other financial interests from them.
d. Might provide market making or underwriting services to issuers that might be mentioned in this document.
e. Might have published papers the content of which is different or incompatible to the information presented herein.
The Bank as well as the other Piraeus Group's companies have enacted, implement and maintain an effective policy, which prevents circumstances that may give rise to conflicts of interests and the
dissemination of any information among the departments (“chinese walls”) and they also constantly comply with the provisions and regulations relevant to inside information and market abuse. Also, the Bank
confirms that it doesn’t have any kind of interest or conflict of interest with a) any other legal entity or person that could have participated in the preparation of the present document and b) with any other
legal entity or person that couldn’t have participated in the preparation of the present document, but had access to it before its publication.
It is duly stated that: the investments described in the present document include investment risks, among which the risk of losing the entire capital invested. In particular, it is stated that;
a. The figures presented herein refer to the past and that the past performance is not a reliable indicator of future performance.
b. In case the figures refer to simulated past performance, that past performance is not a reliable indicator of future performance.
c. The return on investments might be positively or negatively affected as a result of currency fluctuations, in case the figures are denominated in a foreign currency (other than Euro).
d. Any forecasts in relation to future performance, may not be a reliable indicator of future performance.
e. The tax treatment of the information as well as transactions pertained in this document, depends on each investor's individual circumstances and may be subject to change in the future. As a result, the
recipient should seek for independent advice in relation to the applicable tax legislation.
The distribution of the present document outside Greece and/or to persons governed by foreign law may be subject to restrictions or prohibitions according to the applicable legislation. Therefore, the
recipient of the present should seek for independent advice in relation to the applicable legislation, in order to look into such restrictions and/or prohibitions.

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