GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
1.7 Deal Sizes, Fund Sizes and Fundraising In Greece, the private credit market is still relatively small and developing, which is reflected in transaction sizes and fund scale. Typical private credit transac - tions tend to be small to mid-market, often ranging from EUR5 million to between EUR30 million and EUR50 million, with larger tickets being rare and usu - ally involving co-lending arrangements or international lenders rather than purely local funds. Private credit providers face challenges in fundraising, including competition from Greek banks (and local legal/regu - latory obstacles, such as the slow pace of the judicial system in debt enforcement). Despite these challeng - es, interest is gradually increasing as investors look for yield and as alternative financing becomes more accepted in the Greek corporate market. 1.8 Impending Regulation and Reform The most significant regulatory change on the hori - zon for funds active in credit markets stems from pro - posed amendments under the AIFMD II framework, which introduces specific rules for AIFs that engage in loan origination and related activities, with mem - ber states (including Greece) expected to implement these provisions into national law by 16 April 2026. On the other hand, Greek Law 5202/2025 established a national foreign direct investment (FDI) screening mechanism for transactions in sensitive or highly sen - sitive sectors, aligned with EU Regulation 2019/452; while purely financial (portfolio) investments are typically exempt, acquisitions that confer control or exceed specified thresholds may require pre-closing notification and approval, adding complexity for some foreign funds. 2. Regulatory Environment 2.1 Licensing and Regulatory Approval Entities that are established in Greece and provide loans as a business generally must be licensed or authorised under Greek law. In practice, this means that they must fall into one of the recognised regulated categories, such as: • credit institutions licensed by the ECB/BoG;
and as a flexible, bespoke solution where banks may be constrained. 1.4 Challenges The expansion of the private credit market in Greece faces several obstacles. The primary challenge is that lending is a regulated activity, which remains largely the domain of licensed banks, giving domestic banks an entrenched dominance supported by established relationships and government-backed funding pro - grammes (such as the Recovery and Resilience Facil - ity (RRF)). Structural issues within the legal system, including slow insolvency procedures and enforce - ment of collateral, increase the timeline for recover - ing investments, deterring some private credit funds. These factors contribute to a market in which private credit remains a niche player compared to traditional bank financing. Despite these hurdles, ongoing regu - latory reforms and initiatives to improve the business environment are gradually being implemented, and are expected to support the further development of Greece’s private credit market. 1.5 Sponsored/Non-Sponsored Debt In Greece, private credit providers primarily focus on financing private equity sponsors and their portfolio companies, particularly for leveraged buyouts, acqui - sitions and growth capital. Private credit to public or listed companies is still uncommon in Greece, with traditional banks and capital markets typically serving that segment. 1.6 Recurring Revenue Deals and Late-Stage Lending The recurring revenue (RR) financing market in Greece is still emerging. The Greek financial system is domi - nated by traditional bank lending, which focuses on collateral and EBITDA rather than predictable future revenue streams. Most Greek businesses are SMEs, often lacking the scale or structure necessary for such financing models. While there is growth in the technol - ogy and software sectors, and private credit providers are active in Greece, their activity primarily concerns general corporate financing (especially in private equi - ty deals), offering flexibility and higher yields, rather than specialised annual recurring revenue (ARR) loan products.
80 CHAMBERS.COM
Powered by FlippingBook