Investors exercise fraction of Greece's National Bank warrants

ATHENS (Reuters) - Investors exercised only a fraction of National Bank's (NBG) (ATH:ETE) warrants to buy shares in Greece's largest lender from the country's bank rescue fund because the current share price was too low.

As part of Greece's 240 billion euro ($332 billion)international bailout, its top four banks including National Bank, were recapitalised mainly by the Hellenic Financial Stability Fund (HFSF) after losses from a sovereign debt writedown and bad loans.

Investors who took part in National Bank's recapitalisation were given warrants as an incentive. These give holders the right to buy National Bank shares from the HFSF at a set price, known as the strike price.

However, with National Bank's shares trading below the 4.37 euros per share strike price, investors exercised only 31,046 warrants out of an outstanding total of 245.7 million in the first exercise period, the bank said on Tuesday.

That means they will buy 255,410 National Bank shares from the HFSF, which owns about 84 percent of the bank.

The transaction will result in proceeds of 1.1 million euros for the HFSF and increase the amount of National Bank shares available to be traded by 0.011 percent.

"With NBG shares trading below the strike price of 4.37 euros, the warrants were out-of-the-money. This explains the very limited exercise," said analyst Maria Kanellopoulou at Euroxx Securities.

National Bank shares were changing hands at 3.96 euros early on Tuesday.

Warrant holders had the right to acquire 8.23 National Bank shares per warrant at 4.37 euros per share in the first exercise period, which ran from December 19 to 27.

They have right to buy shares in semi-annual exercise periods up to December 2017. The strike price increases progressively up to 5.4 euros in 2017. ($1 = 0.7239 euros)

(Reporting by George Georgiopoulos; Editing by Erica Billingham)