GREECE Trends and Developments Contributed by: Panagiotis (Notis) Sardelas and Matina Kagkelari, Sardelas Petsa Law Firm
bespoke financing solutions that banks cannot com - petitively provide under their regulatory burden. Traditional Financing Tools and Their Limitations Given that under the existing legal framework lend - ing is a regulated activity in Greece and traditionally reserved to banking institutions, while alternative investment funds (AIFs) may not engage in loan origi - nation activities, the ability of private credit funds to provide financing was until now fundamentally rooted in entering into bond loans with Greek sociétés anon - ymes (SAs). Specifically, under the Greek company law (primarily Greek Law 4548/2018), SAs have the right to issue bonds, which can be fully subscribed to by specific investors, including domestic or foreign AIFs. The prevailing view in legal theory is that the professional acquisition of bonds does not constitute a regulated lending activity. In addition, the legal framework sur - rounding this activity is clear and tested, providing legal certainty. This legal instrument allows non-bank creditors to effectively provide lending without violating the exclu - sive activities of “credit granting” as strictly defined by the Bank of Greece. The issuance of a bond is treated as an investment transaction (purchase of a security) rather than a classic banking loan disbursement. In addition, bond loans provide enormous flexibility in structuring terms (covenants), collateral, interest rates and repayment schedules. This allows private credi - tors to tailor financing to the precise needs of the busi - ness – something that banks find difficult to do under their standardised models. A key legal constraint is that this mechanism is avail - able exclusively to SAs. Private credit funds are cur - rently unable to structure formal bond loans for limited liability companies (EPEs) or private company capital (IKES), which constitute a significant portion of the Greek SME landscape. This limitation creates a clear structural vacuum in the Greek SME market. AIFMD II Transposition The most significant legal opportunity for the Greek private credit market in 2026 is the transposition of the revised Alternative Investment Fund Managers
Directive (AIFMD II) into national law. The deadline of 16 April 2026 looms large, standardising the legal framework for loan-originating funds across the EU. This Directive formally clarifies the legal status of loan origination as a core activity of AIFs. AIF managers (AIFMs) will have a clear, harmonised legal basis for direct lending across the EU, partially addressing previous concerns under which some member states (including Greece) did not recognise loan origination as a type of AIF activity. For Greek AIFMs, this means the following. • Legal certainty: the Directive provides a clear mandate that the activity of direct lending (loan origination) is permitted for AIFs. The transposition into national law is expected to remove previous legal restrictions and formalise this pathway, finally enabling AIFs to lend directly to the broader range of Greek SMEs, and moving beyond the current SA bond loan limitation. • Harmonised rules, new requirements: the oppor - tunity comes with enhanced regulatory scrutiny. AIFMs managing loan-originating funds must implement robust policies and procedures for credit risk assessment, administration and monitor - ing of their credit portfolios. The successful and comprehensive transposition of AIFMD II is expected to reshape the Greek legal framework, providing the necessary regulatory cer - tainty and flexibility for the private credit market to mature and significantly expand its reach into the real economy, particularly for SMEs that were previously underserved. Other Significant Legal Developments in Greece (2025–2026) Beyond the central transposition of AIFMD II, the Greek legal framework for private credit is simultane - ously being reshaped by various other reforms that have come into effect or are expected to be finalised during the 2025–2026 period. These changes aim to improve the enforcement environment, facilitate col - lateral arrangements and enhance overall investor confidence.
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