Alpha Bank has secured a EUR 806 million bond loan to finance the expansion of Athens International Airport (AIA), Greece’s largest and most crucial aviation hub, which serves millions of international and domestic travelers each year. The financing arrangement represents a significant investment aimed at enhancing the airport's infrastructure to support Greece’s growing tourism and transport sectors.
Koutalidis Law Firm played a key advisory role, representing Alpha Bank in this substantial transaction. The firm’s guidance facilitated the issuance of a secured bond loan, which will support critical upgrades to AIA’s facilities and operations. In addition to the new loan, Koutalidis advised a syndicate of the four Greek systemic banks on the amendment and restatement of four major bond loans issued by AIA, originally granted in 2019, 2022, and 2024, further solidifying the long-term financial framework necessary for the airport's growth.
The Koutalidis advisory team was led by Partner Dr. Ioannis Kaptanis and Senior Associate Dimitris Kalyvas, with Associates Marina Angoura, Nike Konidaris, and Gerasimos Siokos playing pivotal roles in managing the complexities of this high-stakes financing arrangement.
This latest transaction underscores Alpha Bank’s commitment to supporting key national infrastructure projects and Koutalidis Law Firm's expertise in high-value finance transactions in Greece.
Q&A with Ioannis Kaptanis and Dimitris Kalyvas at Koutalidis
Can you tell us what role Koutalidis played in advising on the amendment of AIA’s previous bond loans?
Continuing our 2018, 2019, 2020 and 2022 mandates by the syndicate of the four Greek systemic banks with regard to the issuance by AIA of bond loans for, among others, the financing of five construction projects, including premises’ expansions and upgrades, the refinancing of its existing indebtedness, the financing of its general corporate and working capital purposes and the installation of PV stations with battery energy storage system and heat pumps, we advised the syndicate of the banks in respect of the amendments to the existing bond loans that were required in view of the provision of the new EUR 806 million bond loan.
Such amendments were made in respect of the entire set of finance and security documents, entailed a complicated structure and their implementation involved hard work to ensure the alignment of the terms of the existing loans and the new loan yet preserving their autonomy and individual elements.
The extensive work required within the tight deadlines to ensure the viable completion of AIA’s financing coupled with the collaboration of both local and international counsel with the company and the separate teams of the banks further underscored the challenging and demanding aspects of this deal.
What is the anticipated timeline for AIA’s expansion, and how does this financing support each phase?
It has been published in the press that the implementation of the first phase of the expansion plan will start in the first quarter of 2025, to be completed within 2028, so that the country’s largest airport will be able to welcome 33 million passengers annually, while it currently serves 26 million passengers.
As per media reports, the project will include, among others, an expansion of the main terminal by 81,000 square meters, additional plane slots, baggage handling and passengers’ gates, as well as a new runway with 32 plane slots, along with a new VIP terminal, while a multi-story parking garage for the airport’s visitors and the expansion of the surrounding road network are also part of the expansion plan.
The terms of the bond loan allow for multiple drawdowns to occur in accordance with the progress of the construction works whereas the final maturity date of the loan is by the end of 2042.
What are the expected impacts of this expansion on Greece’s tourism and transport sectors?
It is inevitable that the expansion of Greece’s biggest and busiest airport will have a direct and positive impact on the country’s tourism and transport sectors. More specifically, the expansion will increase the airport's capacity, allowing more passengers to travel to and from Greece. It is expected that the expansion plan will increase the capacity of the airport to 50 million passengers by 2045. As a major gateway for international tourists, this could help accommodate the growing demand for flights, especially during peak tourist seasons.
Also, with more modern and larger facilities, AIA will likely attract more airlines, including low-cost carriers, opening additional routes to new markets. This enhanced connectivity can stimulate inbound tourism from countries that were previously underserved or not directly connected to Athens.
Further, increased air traffic and the resultant growth in tourism could lead to higher demand for domestic transport services such as buses, taxis, rental cars, and trains. This can boost regional economies, especially in popular tourist destinations around Greece. Also, the expansion will create both direct and indirect employment opportunities. Direct jobs will be generated in airport operations, construction, and management, while the indirect impact will be seen in sectors such as hospitality, retail, and transportation services.
"As tourism is a significant contributor to Greece's GDP, the expansion of AIA could be a catalyst for broader economic growth. Also, the expansion in transport infrastructure supports the country’s broader economic development strategy, particularly in tourism-dependent regions."
All in all, the airport’s expansion is expected to have a transformative effect on Greece’s tourism and transport sectors. By enhancing infrastructure, increasing capacity, and improving passenger experience, the expansion will attract more tourists, boost local and national economies, and strengthen Greece’s position as a major European and Mediterranean hub for travel. Furthermore, it could help to foster sustainable growth and improve connectivity, ensuring that the benefits extend well beyond Athens itself.
What were some of the unique challenges of structuring this bond loan for Athens International Airport?
The terms and conditions of the new bond loan were based on the precedents of the existing bond loans of AIA with the Greek systemic banks, yet a negotiation took place between the parties in respect of business issues including also structural points.
Also, the designation of the required expansion bond loan as “Designated Debt” for the purposes of the Airport Development Agreement added to the complexity of the transaction, entailing also the preparation of additional contractual documents.
Further, in addition to the determination of the terms of the new bond loan a parallel exercise had to be carried out, in respect of the alignment of the terms of the existing bond loans and the new loan, preserving at the same time their autonomy and individual elements.
The above entailed the collaboration of both local and international counsel with the company and the separate teams of the banks (Alpha Bank on the new bond loan and the syndicate of the banks in respect of the amendments to the existing loans) representing them in the parallel workstreams described above.
How does Koutalidis plan to continue supporting AIA and Alpha Bank throughout the expansion process?
We will continue advising Alpha Bank in respect of the drawdowns that will take place throughout the duration of the bond loan, particularly by reviewing the relevant conditions precedent and preparing the necessary documents, including any legal opinions required thereto. We will also support the transaction in case any amendments to the contractual documents are required and generally in respect of any post-closing matters that may occur.
"By offering tailored legal support and accumulating previous experience on AIA’s financings, we can help ensure that both AIA and Alpha Bank successfully navigate the complexities of the project, mitigate risks, and achieve their strategic objectives. We would be committed to providing both proactive and reactive legal counsel throughout the entire lifecycle of the expansion, helping to create a world-class airport while safeguarding the interests of all stakeholders involved."
