In recent years, alternative sources of funding have gained increasing relevance in Greece as a complementary financing channel. The primary lending activity, however, is still reserved for licensed credit institutions and credit companies supervised by the Bank of Greece (BoG) and the European Central Bank (ECB).

As a result of the banking monopoly in lending, private credit financing usually takes the form of bond loan issuances, pursuant to Greek Law 4548/2018 (the “Company Law”).

Furthermore, robust activity exists in the secondary market for the sale and servicing of loan portfolios, where specialised licensed servicers (credit servicing firms, E.DA.D.A.P) manage receivables on behalf of acquiring companies.

Over the past 12 months, the broader credit environment in Greece has shown signs of improvement amidst a more favourable economic climate. There is growing demand for alternative financing solutions to complement the traditional banking system, which, despite significant improvements in asset quality (NPL reduction to around 3.6% by mid-2025), remains cautious regarding risk appetite.

The implementation of Directive (EU) 2024/927 (AIFMD II) is expected to act as a key driver for further development of Greece’s private credit market, providing the necessary regulatory tools to support its growth, as under the existing legal framework alternative investment funds (AIFs) in Greece may invest in transferable securities (such as bonds) but may not engage in loan origination activities.

Over the past six months, Greece’s public debt markets have been active and well subscribed, reflecting strong investor demand and confidence in the country’s investment-grade outlook. Large transactions, such as bond issuances by systemic banks, have demonstrated significant liquidity and competitive pricing. Additionally, several major Greek corporates have successfully accessed public markets through corporate bond issuances via public offerings on the Athens Exchange.

Despite this activity, there is little evidence of Greek corporates refinancing private credit through public debt instruments. Greece does not have a fully developed private credit market, and most corporate refinancing continues to occur via traditional bank lending.

The overall M&A and private equity market in Greece has shown significant growth in the last 12 months, driven by improved macroeconomic stability and foreign investor confidence. This increased activity has heightened the need for various financing sources. Traditional bank lending, however, often through syndicated loans, remains the dominant and preferred form of acquisition financing in Greece, particularly for larger, established companies. Private credit is primarily seen in specific scenarios such as start-up acquisition finance and smaller-scale transactions, and as a flexible, bespoke solution where banks may be constrained.

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 programmes (such as the Recovery and Resilience Facility (RRF)). Structural issues within the legal system, including slow insolvency procedures and enforcement of collateral, increase the timeline for recovering 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 regulatory 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.

In Greece, private credit providers primarily focus on financing private equity sponsors and their portfolio companies, particularly for leveraged buyouts, acquisitions 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.

The recurring revenue (RR) financing market in Greece is still emerging. The Greek financial system is dominated 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 technology and software sectors, and private credit providers are active in Greece, their activity primarily concerns general corporate financing (especially in private equity deals), offering flexibility and higher yields, rather than specialised annual recurring revenue (ARR) loan products.

In Greece, the private credit market is still relatively small and developing, which is reflected in transaction sizes and fund scale. Typical private credit transactions 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 usually 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/regulatory obstacles, such as the slow pace of the judicial system in debt enforcement). Despite these challenges, interest is gradually increasing as investors look for yield and as alternative financing becomes more accepted in the Greek corporate market.

The most significant regulatory change on the horizon for funds active in credit markets stems from proposed amendments under the AIFMD II framework, which introduces specific rules for AIFs that engage in loan origination and related activities, with member 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 sensitive 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.

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;
• financial institutions/credit companies licensed and supervised by the BoG (which, following the enactment of Greek Law 5072/2023, are permitted to grant consumer credit products, residential loans to individuals and credit solutions to indebted persons, both individuals and companies; or
• EU-authorised banks or financial institutions operating in Greece through passporting (branch or services).

Foreign (third-country) lenders generally cannot offer regulated services in Greece unless they establish a licensed subsidiary. Other permissible non-bank financing avenues include factoring and leasing (which are also regulated activities).

Greek law permits both domestic and foreign lenders to take security or guarantees over assets located in Greece, provided the creation and perfection follow the relevant Greek formalities, (eg, registration with the cadastre/land registry or pledge registry) and payment of applicable costs or taxes. Non-EU entities face restrictions on direct ownership of real estate in specific “border areas” due to national security concerns.

The creation, perfection and enforcement of security interests over assets in Greece are governed by Greek law, regardless of the loan agreement’s governing law. Foreign lenders can enforce their rights if they hold an enforceable title, which can often be recognised in Greece, particularly for EU judgments.

As noted in 1.1 Private Credit Market, direct lending is a regulated activity in Greece. The BoG is the lead supervisor for entities that provide credit directly (ie, credit institutions and credit companies) or manage debt portfolios (credit servicing firms). The BoG also supervises financial leasing, factoring companies and microfinance institutions. The Hellenic Capital Markets Commission (HCMC) regulates private credit when structured through investment vehicles, such as AIFs, and supervises the asset management firms overseeing them. The HCMC acts as the lead supervisory authority, operating within the broader EU regulatory framework and in co-ordination with the European Securities and Markets Authority (ESMA) and other competent national authorities.

As noted in 1.1 Private Credit Market, lending is a regulated activity in Greece. There are generally no outright prohibitions on foreign investment in private funds; however, as mentioned in 1.8 Impending Regulation and Reform, significant FDIs are now subject to a mandatory screening regime, which became fully operational in November 2025. This framework requires non-EU investors – and EU entities under third-country control – to obtain prior clearance for acquisitions of 25% or more in “sensitive” sectors (such as energy, healthcare and digital infrastructure) or 10% or more in “highly sensitive" sectors (including defense, AI and cybersecurity). Pure portfolio investments intended for financial purposes without management influence are, however, typically exempt.

Compliance and reporting requirements for credit providers in Greece depend significantly on the specific type and regulatory classification of the respective entity – more specifically, as follows.

Entities that qualify as credit institutions or regulated financial institutions fall under the supervision of the BoG and must comply with prudential, governance and periodic reporting obligations.

Credit servicing firms and purchasers are operating within the regulatory framework of Greek Law 5072/2023 and BoG Executive Committee Act 244/25.07.2025, effective as of July 2025, which established detailed and regular reporting obligations for credit servicing firms, with requirements covering loan portfolios, collateral policies and restructuring activities. Reporting obligations are also imposed on credit purchasers, centered on ownership structure, transparency and strategic portfolio changes.

Entities structured as AIFs or managed by an AIF Manager (AIFMs) are subject to AIFMD-related transparency and reporting obligations under the supervision of the HCMC. Following the implementation of the AIFMD II framework in Greece, AIFMs involved in loan origination activities will be required to implement dedicated policies for the assessment of credit risk and the ongoing monitoring of their loan portfolios.

As of 1 December 2025, investment funds operating in Greece, including UCITS, AIFs and private equity funds (defined as unleveraged entities investing primarily in equity-like instruments of unlisted companies), must submit detailed quarterly reports to the BoG on their holdings, loans, returns and liabilities. This enhanced reporting framework aims to provide the BoG with a more holistic view of systemic risk and capital flows within the non-banking financial sector.

While there are general international concerns about the opacity and systemic risks of the growing private credit market, there is no specific public information about unique regulatory concerns regarding club lending by private credit providers in Greece. Local antitrust regulators, such as the Hellenic Competition Commission, generally focus on traditional competition issues and market dominance rather than on private credit lending structures specifically.

Private credit transactions are primarily structured as bond loans issued by Sociétés Anonymes (SAs) under the Company Law and are subscribed via private placement. Bond loans issued under the Company Law are exempt from the interest rate caps set by the ΒοG for non-bank credit. This provides the parties with the contractual freedom to freely negotiate and determine the interest rate. In addition, they offer significant tax benefits and reduced registration fees.

The prevailing view in legal theory is that the professional acquisition of bonds does not constitute a regulated lending activity; this is supported by the fact that UCITS and AIFs – which by default invest professionally – are expressly permitted by law to invest in bonds. However, in the absence of specific case law or regulatory guidance, it cannot be ruled out that a fund established with the exclusive purpose of providing such type of credit might be characterised as engaging in regulated lending by the competent authorities.

Recent regulatory reforms have significantly expanded the landscape for alternative lenders. Under Greek Law 5072/2023, credit companies are now authorised to grant a wide range of credit facilities to both individuals and businesses, moving beyond their previous focus on consumer credit. More importantly, credit servicing firms have been empowered to provide financing for the purpose of refinancing and restructuring debts within the portfolios they manage, effectively acting as private credit providers in the secondary market.

The landscape for direct lending is expected to change with the transposition of AIFMD II into Greek law. This new framework explicitly recognises and regulates “loan-originating AIFs” across the EU, setting out specific requirements for leverage, liquidity management and risk diversification. Once integrated into domestic law, it is expected to provide a robust “passportable” structure for AIFs to engage in direct loan origination, effectively bridging the current gap between bond-based financing and traditional bank lending.

As of late 2025, a formal draft law for the transposition of AIFMD II has not yet been submitted to the Greek Parliament. ESMA has, however, already issued its Final Report on Draft Regulatory Technical Standards (RTS) on loan-originating funds under the AIFMD in October 2025, which, once adopted by the European Commission as a Delegated Regulation, will provide the necessary technical specifications for liquidity management tools and credit monitoring that will be directly applicable to Greek loan-originating AIFs.

Private credit in Greece is predominantly structured through bond loans. The core documents are the following.

• Bond loan programme: the primary document detailing terms, conditions, financial covenants and events of default.
• Subscription agreement: governs the issuance and relationship between the issuer and bondholders. It is often incorporated into the bond programme.
• Bondholder agent agreement: the agreement by which a bondholder agent (typically a bank or a financial institution) is appointed to act for all bondholders. Under Greek law, the appointment of such an agent is mandatory for bond loans, among others, when collateral is granted. The bondholder agent holds all collateral in its own name for the collective benefit of all creditors, manages payments, monitors covenant compliance, and, crucially, is the sole entity legally empowered to declare an event of default and initiate enforcement actions on behalf of the entire syndicate.
• Security documents: typically involve pledges or mortgages held by the bondholder agent for the account of bondholders.

Agreements among lenders (in the form of intercreditor agreements) are commonly negotiated for complex transactions, such as syndicated loans or mezzanine finance structures involving different debt tranches. They are used to vary the priority of payment, security and enforcement rights among a group of lenders.

FOLO-like economic arrangements in bond issuances through an agreement among lenders are legally feasible under Greek law. However, traditional senior/mezzanine structures remain the prevailing financing model in the Greek bond market.

External factors that influence drafting include Greek Law 5123/2024, which introduced a modernised and unified framework for pledges and security interests over movable assets and claims. This reform significantly updates bond loan documentation by providing clearer rules and procedures, and improves transparency.

Please refer to 2.1 Licensing and Regulatory Approval and 2.3 Restrictions on Foreign Investments.

There are generally no statutory restrictions on a corporate borrower’s use of proceeds from credit transactions. Specific limitations may apply if the borrower is a regulated entity. In addition, credit/financial institutions and AIFMs are bound by Greek Law 4557/2018 “on the prevention of the use of the financial system for money laundering or terrorist financing”, implementing the relevant EU Directives.

Restrictions are typically imposed through contractual representations, warranties and covenants within the loan agreements, negotiated between the credit provider and the borrower.

Private credit providers in Greece face practical and legal challenges, including the following.

• Regulatory hurdles:
1. FDI screening regime (see 2.3 Restrictions on Foreign Investments); and
2. digital resilience compliance under Law 5193/2025 (implementing EU DORA 2022/2554), imposing strict governance and IT standards on financial entities, and increasing administrative burden.
• Structural and financing limitations:
1. bond loans – offer tax benefits and lower registration costs but require an SA borrower and formalities; and
2. financial assistance restrictions – target SAs cannot generally fund or secure the purchase of their own shares (“whitewash” procedures exist but are complex).
• Judicial delays – despite reforms, insolvency and enforcement processes remain lengthy.
• Market context – private credit is higher-cost than traditional banking and is mainly used for special situations, bridge financing or high-risk projects.

Debt buybacks are generally permitted in Greece, particularly within the prevalent framework of bond loans, provided specific structural and legal requirements are met. If the repurchase is made by the issuer itself, the acquired notes must either be immediately cancelled (definitive repayment) or be held for re-issuance, provided the agreement allows for it (revolving structures).

Most agreements include specific “purchase of notes/bonds” or “debt purchase transactions” clauses. These often restrict the borrower or its affiliates from purchasing debt unless they waive certain rights, such as voting at bondholder meetings, to prevent the borrower from controlling the creditor group’s decisions.

Sponsors typically face fewer direct statutory restrictions than the borrower when conducting a buyback. However, they are often required to participate as a guarantor in the underlying credit, which they may resist due to their own internal by-laws or fund-level liability restrictions. Additionally, to manage conflicts of interest, Greek credit agreements include clauses that strip the sponsor of voting rights on any repurchased debt to prevent them from controlling creditor decisions.

Please refer to 3.2 Key Documentation.

Owing to the dominance of traditional bank financing, junior and hybrid instruments remain alternative solutions, primarily reserved for highly leveraged transactions, major infrastructure projects or complex M&A scenarios.

Documentation for junior and hybrid deals is far more bespoke than standard senior bank loans. Junior capital – usually via bond loans – relies on intercreditor agreements for subordination, carries higher pricing and offers flexible covenants. Hybrid instruments – mezzanine or preferred equity – are highly specialised and often used in start-up acquisitions or distressed restructurings, and may include PIK interest and equity kickers, giving lenders upside participation rarely seen in traditional Greek bank lending.

In Greece, holding company (HoldCo) deals are typically secured. The most common form of collateral involves pledge of shares in subsidiaries, which are the primary sources of value and cash flow. Lenders may also seek guarantees from the operating companies (OpCos), intercompany loans, or assignments of future cash flows such as dividends. Additionally, other forms of collateral – such as real estate, receivables, or intellectual property held by subsidiaries – may be included.       

The Company Law explicitly permits PIK structures for bond loans; however, their use is still infrequent and largely restricted to complex debt restructurings. While traditional banks primarily provide amortising loans, bullet repayments are common in bond loans.

Market practice for bond loans typically provides for an issuer call option in the bond programme, subject to a make-whole provision during the first 12 to 18 months following issuance, and thereafter a call price above par under a declining premium schedule, ensuring that lenders achieve a minimum guaranteed return prior to any refinancing at a lower cost.

The tax treatment of payments depends on the type of the credit and the lender as well as on the specific terms of the credit agreements.

Under the Greek Income Tax Code (Greek Law 4172/2013, as in force), payments of loan principal are not subject to withholding tax (WHT), whereas interest payments to non-resident providers are generally subject to a 15% WHT, unless reduced or eliminated by a double taxation treaty. Interest paid to credit institutions (Greek or foreign branches) is generally exempt from WHT.

While interest on standard corporate bond loans often attracts the 15% rate, if the bonds are listed on a regulated market or a multilateral trading facility (MTF) within the EU or on a recognised exchange elsewhere, non-resident bondholders are exempt from WHT; resident bondholders who are natural persons (individuals) are subject to WHT at a rate of 5% (with effect from 11 April 2025).

Effective 1 December 2024, stamp duty was replaced by the digital transaction duty (DTD). For loans between legal entities, the rate is 2.4% on the principal amount. DTD is capped at EUR150,000 per loan agreement. Crucially, bond loans issued under the Company Law remain exempt from DTD. DTD applies if at least one party is a Greek tax resident or has a permanent establishment in Greece, regardless of where the agreement is signed.

A special annual contribution of 0.6% is also imposed on the average outstanding monthly balance of loans granted by credit and some financial institutions. Financing structured as a bond loan is typically exempt from this levy.

The costs for establishing and perfecting security in Greece depend on whether the financing is structured as a bond loan or a standard bilateral loan. For credit lenders using bond loans, perfection costs are significantly incentivised: the registration of pledges (at the Electronic Pledge Registry) or mortgages (at the land registry/cadastre) is capped at a flat fee of EUR100 per security interest. In contrast, standard loans are subject to proportional registration fees, typically ranging from 0.75% to 0.8% of the secured amount.

Beyond registration fees, lenders must account for notary and legal contributions. Notary fees for drafting security deeds are generally around 1% of the value (often subject to negotiation for high-value transactions), while legal costs may include mandatory contributions to the Lawyers’ Fund and Bar Associations.

Other tax considerations include the following.

• VAT: financial services, including granting credit, are generally VAT-exempt. However, ancillary services (eg, certain management fees) may be subject to the standard 24% VAT.
• Capital gains: gains from the transfer of securities (such as bonds) are typically not taxed in Greece for non-resident lenders unless they maintain a permanent establishment.

The most immediate concern for a foreign lender is the 15% interest WHT applied to interest payments from Greek borrowers. Additionally, standard bilateral loans are subject to a 2.4% DTD. Lenders also face a permanent establishment risk; if credit decisions or loan management are conducted through a fixed base or dependent agent in Greece, the lender’s profits could be subject to the standard 22% corporate income tax.

To optimise these costs, lenders and borrowers typically employ the following strategies.

• Structuring as a bond loan: bond loans are fully exempt from the 2.4% DTD. In addition, if the bonds are listed, non-resident bondholders are exempt from WHT.
• Double taxation treaties (DTTs): foreign lenders can mitigate the 15% WHT by utilising DTTs between Greece and their home jurisdiction (eg, Luxembourg, Ireland or the UK), which often reduce the rate to 10%, 5% or 0%.
• Remote governance: lenders should ensure that all key investment committee decisions and loan administration are performed outside Greece, maintaining the lender’s status as a non-resident for tax purposes.

In the Greek credit market, typical collateral packages combine in rem securities over real estate (mortgages or prenotations), pledges over movable assets and rights (shares, bonds, receivables) and in personam guarantees.

Each asset type follows distinct rules. Real estate mortgages require a notarial deed, whereas, following Greek Law 5095/2024, the establishment of a consensual prenotation of a mortgage is primarily effected via a lawyer’s deed. In both cases, perfection of the security interest is achieved through registration in the public books of the competent cadastre/land registry.

Following the recent Greek Law 5123/2024, pledges are now established through a private or electronic agreement (signed with a qualified e-signature or via gov.gr) between the parties, which is registered in the new Electronic Pledge Registry by either the pledgor or the pledgee. This framework applies to a wide range of assets, including claims, corporate shares and participations, as well as movable property that remains in the debtor’s possession.

For pledges over claims, the agreement must have a certain date, be formally notified to the debtor and be registered in the Electronic Pledge Registry to be effective against third parties.

For shares and bonds listed on the Athens Exchange, perfection remains governed by the rules of the Central Securities Depository (ATHEXCSD) through the Dematerialized Securities System (DSS).

Greek Law 3301/2004, transposing the EU Financial Collateral Directive and applying to financial collateral arrangements for specific eligible assets (cash, shares, bonds, claims), requires only written evidence of the agreement (even electronically). The collateral-taker must be an eligible entity under the law, including financial institutions. Private credit funds may qualify as “other financial institutions” if regulated and licensed in their home jurisdiction in line with the EU Directive.

Improperly perfected security interests do not produce effects erga omnes. As a result, other creditors may validly establish security interests over the same assets, which will take precedence in enforcement proceedings.

Regarding costs, please refer to 4.2 Other Taxes, Duties, Charges or Tax Considerations.

The time required for the establishment of security interests is generally limited and depends primarily on the parties involved. However, delays may occur in the registration of mortgages or prenotations of mortgages, depending on the efficiency of the competent cadastre.

Greek law permits floating charges from businesses to businesses, over a group of movable professional assets and rights. Floating charges over assets located in Greece require registration in the Electronic Pledge Registry. The charge maintains its floating nature until an event of default occurs or another agreed-upon occurrence takes place, which then triggers its crystallisation into a fixed charge.

Security over future assets and claims is also permitted, if they are at least definable. However, a universal security interest or a general deed of charge over all assets and claims of a company is not permitted; instead, security must be granted on an asset-by-asset or claim-by-claim basis. Both pledges over specific assets and floating charges are used in the Greek market.

The Company Law permits downstream, upstream and cross-stream guarantees, provided they align with “corporate interest” and meet strict transparency requirements. Specifically, an SA cannot guarantee a third party’s debt for the benefit of a related entity without prior board approval, public filing with the General Commercial Registry (G.E.MI.) and a ten-day waiting period for minority shareholder objections. For listed companies, this process is more rigorous, requiring a fairness opinion from an independent auditor to confirm that the transaction is fair and reasonable for the company and its non-related shareholders.

Certain exemptions streamline these requirements, particularly for downstream support where a parent guarantees the obligations of its 100% subsidiaries, or for transactions conducted in the “ordinary course of business” under normal market terms (arm’s length). Transactions in Greece are commonly structured to mitigate legal limitations – such as corporate benefit issues – by utilising on-lending mechanics and guarantee fees. When debt is structured into different tranches with varying guarantee levels – such as a senior term facility and a revolving working capital facility – the allocation of proceeds is primarily managed through intercreditor agreements.

Under the Company Law, an SA is prohibited from providing financial assistance – including down payments, loans or guarantees – to third parties for the purpose of acquiring its own shares (or shares of its parent company). This prohibition may be lifted if the following cumulative conditions are met.

• The transaction must be carried out under the board’s responsibility at market-standard terms (especially regarding interest and security). The board must conduct thorough due diligence on the solvency of all counterparties.
• The general meeting must provide prior consent via increased quorum and majority. This approval is based on a detailed written report by the board justifying the corporate interest, outlining the terms of the acquisition, and assessing risks to the company’s liquidity and solvency. If board members (of the issuer or the parent) are parties to the transaction, a fairness opinion/report by an independent auditor is mandatory.
• The total financial assistance granted must not cause the company’s net equity to fall below the aggregate of its paid-up share capital and non-distributable reserves. To ensure this, an amount equal to the total financial assistance provided must be booked as a non-distributable reserve in the company’s financial statements.

The primary restrictions relate to financial assistance and related parties’ transactions transparency requirements, while significant costs involve notarisation and registration fees. No works council or similar approvals are required.

The Greek insolvency framework establishes a “suspect period”, prior to a bankruptcy declaration – please refer to 7. Bankruptcy and Insolvency. During this timeframe, certain transactions entered into by a debtor can be challenged or automatically annulled to prevent the unfair depletion of assets. Security granted as financial collateral is generally exempt from claw-back rules.

Greek law recognises retention of title (Article 532 of the Greek Civil Code), where the seller retains ownership of goods until full payment of the purchase price. In addition, Greek law recognises anti-assignment clauses (Article 464 of the Greek Civil Code). There are exceptions where anti-assignment clauses are overridden by law, such as the sale and transfer of receivables for securitisation purposes, which takes full effect notwithstanding any contractual restrictions.

A voluntary sale of mortgaged real estate or pledged assets does not automatically release the security. The encumbrance “follows” the asset to the new owner. The consensual release of real estate security in Greece requires the explicit consent of the creditor and formal registration in public records (land registry or cadastre). For mortgages, a notarial deed of release signed by the parties is required. For pledges perfected by the physical delivery of the asset to the creditor or a custodian, the security is released when the asset is returned to the owner. The release of pledges registered in the Electronic Pledge Register is effected digitally through the Register. A guarantee is consensually released when the creditor confirms that the principal debt has been paid in full. No formal registration is needed but the guarantor will typically request a written confirmation letter from the creditor.

Greece recognises and permits multiple liens (encumbrances) on the same asset. Among multiple security interests, the one that was perfected earlier in time (eg, the date of registration for a mortgage) ranks higher. Interests perfected on the same day rank equally (pari passu).

In the case of non-possessory pledges, the mutual priority of two or more secured creditors may be contractually altered by means of a written agreement, provided it is subject to the registration requirements. Furthermore, it is possible for the pledgor (debtor) and a secured creditor to agree that a future pledge, which has not yet been established, shall take priority for a specific amount. The other existing secured creditors are not affected by these agreements.

In addition, creditors in mezzanine or multi-lender financing often use intercreditor agreements, under which subordinated creditors agree to rank below senior creditors with respect to priority in payment, security and enforcement rights. Contractual subordination is recognised under Greek law, and the relevant contractual provisions will survive the insolvency of the debtor; however, they can only affect the priority between secured creditors or subordination of unsecured claims to secured ones. The ranking contractually agreed upon will generally not be binding on the insolvency administrator or other creditors who were not party to the agreement, since Greek insolvency law provides a mandatory statutory ranking of claims. 

The most common security interests arising by operation of law include statutory pledges. A landlord, a hotelier, and carriers or warehousemen benefit from statutory pledges over (respectively) a tenant’s movable assets, guests’ items, and goods transported or stored, to secure unpaid rent, accommodation charges or freight/storage fees. Pursuant to Article 6(1) of Greek Law 2844/2000, statutory pledges rank junior to duly perfected consensual pledges, which are registered in the Pledge Registry.

In addition, pursuant to Article 325 of the Greek Civil Code, a creditor in lawful possession of a movable asset may exercise a right of retention, entitling it to withhold delivery of such asset for as long as it has a due and payable claim related thereto. The exercise of such right may effectively prevent enforcement by a secured creditor until the relevant claim is discharged. In practice, account banks typically benefit from a contractual right of retention over bank accounts maintained with them, pursuant to their general terms and conditions, in respect of any claims they may have against their customers. It is unusual to require a waiver of retention rights.

Furthermore, Greek law recognises statutory privileges, including general privileges under the Greek Code of Civil Procedure, which may affect the priority of distributions in enforcement or insolvency proceedings. Certain privileged claims, such as tax, social security and employee claims, may rank ahead of secured claims, subject to statutory exceptions. For this reason, lenders commonly rely on financial collateral security over cash or financial instruments, which benefits from enhanced protection and out-of-court enforcement.

Where second lien structures are implemented, common intercreditor provisions include:

• contractual subordination of payment;
• turnover obligations;
• standstill periods for enforcement by junior creditors;
• restrictions on amendments or increases of junior debt; and
• detailed enforcement mechanics governing the exercise of remedies and the application of proceeds.

Cash pooling is increasingly used by corporate groups to manage short-term liquidity. Operational cash pooling accounts are usually excluded from the security package. Secured hedging is common in large corporate and project finance. Hedging counterparties typically participate in the intercreditor agreement and share the security package on a pari passu basis.

The role of a security agent is recognised in the bond loan framework, under which any security by the borrower is granted in the name of the Bondholder Agent, for the benefit of the bondholders. Furthermore, under Article 73 paragraph 3 of the Company Law, if the bond loan is governed by foreign law, collateral and guarantees are granted in the name of the person holding them on behalf of bondholders under that law.

Under the Greek Civil Code, security interests are ancillary to the underlying claim. Upon loan assignment, associated mortgages and pledges are transferred to the new lender by operation of law. While this transfer is automatic, it must be registered in the relevant public records to ensure enforceability against third parties, serving as an administrative update rather than a new grant. Bond transfers do not require updates to security filings, since the holder is the bondholder agent.

A secured lender can enforce its collateral in Greece when:

• the secured debt has become due, either by its terms or through acceleration events (eg, breach of contract, non-payment);
• the lender possesses an enforceable title, such as a court judgment, a payment order, an arbitration award or a notary deed; and
• a formal demand for payment has been made, and the debtor fails to pay within a specified grace period (typically three days from notification, varying with security type).

The method of enforcement depends on the type of collateral. For most types, enforcement necessitates a court-supervised public auction, initiated by a bailiff. The procedure includes determining the auction date with a notary, preparing a foreclosure report and notifying the debtor.

Enforcement against a guarantor usually requires initiating a judicial action to obtain a court judgment. In commercial guarantees, standard civil law defences (eg, benefit of discussion) are often waived in the relevant agreements.

Greek Law 5123/2024 has streamlined the enforcement of pledged claims, allowing the pledgee to collect the claim without court procedure after a ten-day grace period from the date the secured claim becomes overdue.

Financial collateral also benefits from a more expedited process. No enforcement title or waiting period is required, and the creditor can enforce through appropriation (acquiring ownership and setting off the value against the debt) or direct sale of the collateral, as per the agreement.

Concerns for non-bank lenders include the following.

• Greek law does not recognise the notion of a trust for security over local assets. A bondholders’ agent is, however, a recognised role within the bond loan framework.
• Non-bank entities acquiring non-performing loans (NPLs) must appoint a credit-servicing firm licensed by the BoG to manage and enforce those claims.

In a typical private credit restructuring, the primary security interests enforced are those providing direct control over the business or key assets (such as share pledges, pledges over claims and mortgages, or non-possessory pledges over machinery or equipment).

As a general rule, a choice of foreign law, a submission to a foreign jurisdiction, and a waiver of immunity will be upheld and recognised in Greece. More specifically, the following are worth noting.

Choice of Foreign Law

Governing framework

For contracts entered into after 17 December 2009, the Greek courts determine the applicable law based on Regulation (EC) No 593/2008 (the “Rome I Regulation”), which generally provides that the law chosen by the parties will apply.

Bond loans

Article 74 paragraph 1 of the Company Law provides that the possibility of choosing the applicable law covers all contractual obligations related to bond loans. Article 74 of the Company Law further clarifies that any matters not falling within the scope of the Rome I Regulation are governed by Article 25 of the Greek Civil Code, which provides that obligations arising from a contract are governed by the law to which the parties have subjected the contract.

Limitations

The choice of foreign law cannot override mandatory Greek law provisions or Greek public policy.

Submission to a Foreign Jurisdiction

EU courts

Under Regulation (EC) 1215/2012, Greek courts are generally obligated to decline jurisdiction and recognise the chosen foreign EU court as having exclusive jurisdiction, provided the agreement is clear and in writing.

Non-EU courts

The validity is assessed under Greek private international law rules and relevant international conventions. Greek courts still typically respect the choice of jurisdiction unless there is a strong reason not to (eg, the clause is vague, or enforcing it would violate a mandatory rule of Greek law). These exceptions are applied narrowly in a commercial context.

Hague Convention

If the foreign court is in a country that is a signatory to the 2005 Hague Choice of Court Convention (eg, the UK), the Greek courts are obligated to uphold the exclusive jurisdiction clause.

Waiver of Immunity

The validity and scope of a waiver of immunity depend on whether it concerns immunity from jurisdiction or immunity from enforcement, and on whether the counterparty is a sovereign entity.

• An explicit agreement to submit to a foreign jurisdiction (or arbitration) is generally considered a valid waiver of jurisdictional immunity in commercial matters.
• A waiver of immunity from jurisdiction does not automatically imply a waiver of immunity from execution (enforcement) against a state’s assets.
• To enforce a judgment against a sovereign entity’s assets in Greece, a separate, explicit and unequivocal waiver of immunity from execution is generally required. Even with a waiver, certain property used for sovereign/public purposes might remain immune from execution unless specifically carved out or the property is clearly used for commercial, not public, purposes.

As a rule, both judgments from foreign courts and arbitral awards are enforceable in Greece without a retrial of the merits of the case, provided certain conditions are met regarding public policy, due process and the specific jurisdiction where the decision originated. 

The enforceability of a foreign court judgment in Greece without a retrial depends on the judgment’s origin.

• Judgments from EU courts are automatically recognised and directly enforceable in Greece. Greek courts cannot review the merits of the case, and can only refuse recognition on very narrow grounds (eg, violation of Greek public policy or failure to observe basic due process rights).
• Judgments from non-EU countries require a formal exequatur procedure (Articles 323 and 905 of the Greek Code of Civil Procedure) before a Greek court can authorise their enforcement:
1. the Greek court will not retry the merits of the case;
2. it will, however, verify specific criteria – ie, that the foreign court had jurisdiction according to Greek private international law rules, that the defendant was properly served and given a fair hearing (due process), that the judgment is final and binding in its home jurisdiction, and, crucially, that its recognition and enforcement do not violate Greek public policy or good morals.
• Judgments from countries participating in the 2005 Hague Choice of Court Convention also benefit from streamlined recognition if the parties had an exclusive choice-of-court agreement.

Arbitral awards are widely respected and benefit from a more consistent international framework than court judgments. Greece is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”). Under this convention, foreign arbitral awards are readily recognised and declared enforceable in Greece via a summary court procedure. The Greek courts cannot review the substance or merits of the arbitral tribunal’s decision. Recognition can only be refused on very limited, internationally agreed grounds, such as a violation of Greek public policy, a lack of due process (eg, a party was unable to present their case) or if the arbitration agreement itself was invalid.

A foreign private credit lender can generally enforce its rights in the same way as a domestic private credit lender.

However, a foreign lender often uses foreign law (eg, English law) for its loan agreement. Greek courts will uphold the foreign law for contractual matters – however, the following should be noted.

• The validity and priority of security over Greek assets are always governed by Greek law and require local registration. The lender must ensure that Greek counsel fully complies with all perfection requirements (eg, registering a mortgage or a non-possessory pledge).
• Enforcement procedures in Greece, including seizure and sale, must follow Greek law, regardless of the loan’s governing law.

Moreover, the FDI screening mechanism (see 2.3 Restrictions on Foreign Investments), can significantly impact a foreign entity’s ability to take or enforce security over assets in certain sensitive sectors, as enforcement of security might be considered an “acquisition of control” which would trigger the screening mechanism.

For other key issues particular to foreign private credit lenders enforcing rights in Greece, see 6.1 Enforcement of Collateral by Non-Bank Secured Lenders.

A typical judicial enforcement process in Greece often takes between 12 and 36 months for a court-supervised public auction of immovable property, while enforcement over certain types of pledges may be shorter. Enforcement of a foreign arbitral award can be quicker than a court judgment due to the New York Convention, requiring a summary enforcement order from a Greek court.

Expedition of enforcement largely depends on the type of security.

• For monetary claims supported by documentary evidence (invoices, checks), a creditor can obtain a payment order quickly (days to weeks), which serves as an immediate enforceable title. Greek Law 5221/2025 makes a significant change in how payment orders will be issued from 1 January 2026, passing the competence from local judges to lawyers, which is expected to expedite the process further.
• Under the recent Greek Law 5123/2024, the pledgee (lender) is entitled to collect the pledged claims on their own account, without needing a court order or public auction, after a grace period of ten business days has passed from the date that the secured debt becomes due and payable.
• The attachment of bank accounts can be a very effective and faster method as it freezes funds immediately, though the release of funds is subject to court procedures.
• Enforcement of financial collateral can be very fast – potentially one to two weeks for appropriation or direct sale – as it bypasses the need for an enforceable title and public auction.

Costs are variable, and are generally prepaid by the creditor and then recovered from the debtor’s assets. They usually include lawyer fees, bailiff/enforcement officer fees (proportional to the debt or action performed and determined by specific ministerial decisions) and court fees. Lenders should also consider valuation costs (when required) and taxes (such as real estate transfer tax, which is borne by the purchaser).

Means to limit costs include the following.

• Amicable settlements or consensual restructurings are often the fastest and cheapest option, avoiding lengthy court battles.
• Utilising payment orders where possible minimises initial litigation costs and time compared to ordinary legal actions. The issuance of payment orders by lawyers is expected to lower the cost associated with obtaining an enforceable title.
• Ensuring that security documents allow for efficient enforcement methods (such as appropriation under financial collateral law) can significantly reduce costs.
• Using a bondholder agent (in a bond loan framework) can consolidate actions, potentially reducing overall legal fees.

Considerations for Lenders

Practical considerations for lenders in Greece include the following.

The Greek judicial system can be slow, with enforcement actions (especially real estate auctions) often subject to numerous procedural challenges and delays that extend the recovery timeline significantly.

Debtors frequently challenge the validity of the underlying debt or the enforcement procedure itself (eg, alleging a violation of due process or public policy), requiring the lender to engage in further litigation to confirm their rights. Recent legislation, however, restricts the grounds upon which a debtor can challenge enforcement actions. The overall legislative trend in Greece aims to streamline debt recovery and minimise the scope for debtors to raise time-consuming, non-substantive challenges.

If the debtor enters formal insolvency, an automatic stay on individual enforcement actions is imposed. Lenders may also face “claw-back” actions where security granted during a “suspect period” can be unwound.

Accurately valuing collateral – particularly niche real estate or complex business assets – can be difficult, leading to disputes during the auction process.

The enforcement of security – particularly against operational businesses or residential property – can be a sensitive socio-political issue in Greece. Foreign “private credit” funds may face adverse publicity, which can indirectly impact political will or regulatory decisions, even if their actions are legally sound.

How Challenges Are Addressed

Private credit lenders address these challenges as follows.

Lenders use structures such as the bond loan framework, which offers a recognised agent role, to mitigate some local law friction points.

Private lenders typically partner with established, BoG-licensed local credit servicing firms that possess local expertise, infrastructure and an understanding of the legal and political landscape.

Lenders conduct extensive due diligence pre-investment, focusing on data quality, collateral value, and potential legal or regulatory issues to anticipate challenges during enforcement.

Loan and security agreements are meticulously drafted to include express waivers of all possible debtor and guarantor defences and to stipulate expedited enforcement methods, where permitted by Greek law.

Where possible, lenders push for security structures that fall under the expedited regime of financial collateral law, or for pledges over claims (such as rents, invoices or bank accounts) under Greek Law 5123/2024, which allows the lender to bypass the time-consuming public auction process required for other types of securities.

Greek Law 4738/2020 (the “Insolvency Code”) provides for two in-court procedures: insolvency and pre-insolvency restructuring (rehabilitation).

Insolvency focuses on collective creditor compensation through liquidation of the debtor’s assets, while restructuring aims to compensate creditors while preserving and reorganising the debtor’s property. Both the declaration of insolvency and the ratification of a restructuring agreement are issued by the competent multi-member first-instance court.

Once insolvency commences, individual proceedings are automatically suspended. Such suspension does not extend to secured creditors, who are entitled to commence enforcement proceedings within nine months of the bankruptcy declaration, provided the bankruptcy application does not request that the debtor’s assets be liquidated either as a whole or in operational part. Claims against co-debtors and guarantors continue to be executed as individual proceedings and remain outside the scope of insolvency.

During restructuring, individual proceedings and any ongoing insolvency are suspended from filing until court ratification or rejection of the agreement, for a maximum of four months. The court may also suspend claims against co-debtors or guarantors if necessary.

Upon insolvency declaration, the court appoints an administrator for the debtor’s property, who manages and disposes of estate assets. Exceptionally, the debtor may continue management with court approval and creditor consent but must collaborate with the administrator.

In restructuring, the court may appoint a special proxy to manage the debtor’s property at the request of the debtor or a creditor.

In Greek insolvency, proceeds are distributed according to a statutory waterfall under the Insolvency Code. “Super-priority” claims – bankruptcy costs, liquidator fees and interim financing – are paid first. Remaining assets are typically allocated as follows:

• 65% to secured creditors;
• 25% to general privileged creditors (including employee wages/severance from the last two years and state tax/social security debts); and
• 10% to unsecured creditors.

In practice, certain claims may be further prioritised to maintain business continuity or meet social objectives. Unpaid employee compensation up to a capped amount may take absolute priority for a limited period, potentially outranking secured lenders.

During rehabilitation, critical vendors essential to operations are often paid in full or given preferential terms to prevent collapse.

The law imposes a maximum timeframe of five years for the process to conclude, after which the effects of the insolvency cease. However, if the business or its operational parts are sold as a whole, the process should conclude within 18 months.

Historically, the recovery rates for creditors in Greek insolvency proceedings have been low, often failing to match the company’s valuation at the time of filing due to judicial delays and asset depreciation. While the current legal framework introduced streamlined mechanisms such as the sale of a business as a “going concern” to maximise value, the reliability of these recoveries remains heavily dependent on the speed of the courts, the efficient management of the administrator and the presence of liquid markets for distressed assets.

Greek businesses can pursue an extrajudicial debt settlement for debts over EUR10,000 via a centralised electronic platform. The process enables collective restructuring with financial institutions, the State and social security funds through an automated proposal based on the debtor’s financial capacity. Once 60% of financial creditors (by claim value) approve, state entities are legally required to participate, allowing for significant haircuts and repayment schedules of up to 240 instalments for public debt and 420 for financial institutions. Institutional creditors are generally obliged to accept the algorithm-generated plan if it meets the “best interest of creditors” test. During the typical 90-day negotiation period, individual enforcement actions are temporarily stayed to preserve the debtor’s estate.

Lenders may face several risk areas.

• Transactions that occurred during a “hardening period” can be clawed back, posing a risk to recent collateral obtained by the lender.
• Insolvency proceedings generally impose a stay on individual enforcement actions. For secured creditors, a stay is imposed only if the court orders the sale of the business as a going concern, delaying recovery until that sale process is completed or terminated.
• Claims against insolvent guarantors must be pursued within separate proceedings, often yielding only partial recovery.
• Historically, the Greek judicial system has tended to extend recovery timelines.

Transactions during the hardening (“suspect”) period – between cessation of payments and the insolvency declaration (up to two years prior) – are subject to avoidance. Acts mandatorily voidable include gratuitous transactions, premature debt repayments, and new security granted for previously unsecured obligations.

Transactions for consideration may be challenged if the counterparty knew of the debtor’s payment cessation and the act harmed creditors’ collective interests. Where the debtor acted with fraudulent intent, the reach-back extends to five years, provided the third party was aware.

Critical safe harbours protect commercial stability: transactions in the ordinary course of business or under a court-ratified rehabilitation agreement are generally exempt from avoidance.

Set-off is generally permitted in insolvency, provided the requirements for mutual claims were met before the declaration of insolvency. In addition, provisions such as netting agreements in financial contracts (eg, ISDA) are generally binding and respected.

A typical private credit out-of-court restructuring aims for rapid consensual solutions to preserve enterprise value, often using amortisation holidays, PIK interest or debt-for-equity swaps. For bond-financed debt, restructuring can involve convertible bonds that convert into equity under set conditions. These measures are implemented via intercreditor agreements or the centralised electronic platform.

The co-operation of existing equity holders is crucial, as their consent is usually required. Additionally, a 60% majority of financial creditors must agree to invoke statutory “cram-down” on dissenting creditors or state entities; without such collective consent, the restructuring remains bilateral and cannot bind non-participating parties.

The in-court rehabilitation process offers strategic advantages over consensual workouts. It allows the use of statutory “cram-down” to bind dissenting creditors, provided they are no worse off than in liquidation, and enables asset transfers free of the debtor’s historical liabilities. New financing is incentivised through a priority (“first-class general privilege”) for repayment. The process also provides legal certainty, including a judicial stay on enforcement actions for up to 12 months and tax exemptions on asset transfers and debt write-offs, creating a secure environment for private credit investors to execute complex restructurings.       

The Insolvency Code manages dissenting lenders through statutory majority rules and a cross-class cram-down. In-court rehabilitation can be ratified by either a 50% majority across secured and unsecured classes or a 60% overall majority with 50% of secured claims. The electronic platform mandates participation of dissenting state entities and financial creditors once a 60% threshold is met.

For private credit structures with bond loans, dissenting lenders are often internally crammed down via contractual supermajority provisions at bondholder assemblies.

Dissenting lenders are protected during court ratification through the “best interest of creditors” test, which ensures that no creditor is worse off than in liquidation. The court also enforces principles of equal treatment within the same creditor class and prevents lenders from being forced to inject “new money” against their will. These safeguards allow creditors to object during court hearings or appeals.

Restructurings in Greece aimed primarily at the balance sheet are typically accomplished through the in-court restructuring procedure or the out-of-court platform described respectively in 7.1 Impact of Insolvency Processes and 7.4 Rescue or Reorganisation Procedures Other Than Insolvency.

Greek courts recognise restructuring support agreements as valid contractual obligations. While enforcement occurs primarily through the formal ratification of a rehabilitation plan, these agreements serve as crucial evidence of creditor consensus; however, clauses that override public policy or impose unenforceable penalties may not be upheld.