"Doom-loop" broken? NBG preps bond sale at lower yield than sovereign

• The €750M 5-year unsecured note for National Bank of Greece (NBG -2.7%) is expected to come to market tomorrow maybe priced to yield as low as 4%. A recently government 5-year note is yielding 4.76%.
• Banks typically must offer a higher yield than the underlying sovereign due to the perceived added safety of government paper, but Greece's default kind of blew up that model. "The new institutional framework for banks in the eurozone could make a strong case for banks pricing through their sovereigns in the future," says L&G credit research head Georg Grodzki.
• "It doesn't make a lot of sense," says a syndicate banker, but people will buy the paper because they think it will perform.
• Source: Seeking Alpha April 23rd, 2014