<table><tr><th>From:</th><th>jeffrey E. &lt;jeevacation@gmail.com&gt;</th></tr><tr><td>Sent:</td><td>Thursday, June 26, 2014 7:10 PM</td></tr><tr><td>To:</td><td>Nav Gupta</td></tr><tr><td>Subject:</td><td>Re: Jeffrey - I like Alpha Bank (Greece) listed Call Warrants (ticker ALPHAW GA) to play
the Greek story from here</td></tr></table>

size?

On Thu, Jun 26, 2014 at 2:34 PM, Nav Gupta < <mailto » > wrote:

## Jeffrey

I like the Greek recovery story, i like Alpha Bank among the banks there and I think the 3.5yr call warrants issued a year ago which have very little time value priced in and priced close to intrinsic, are the best way to buy the stock and the broader story=

## Background

2. In the short term bank asset quality continues to deteriorate. NPL is 35, double the rate of Italy and > 3x that of Spain

3. Greek banks raised eur50bn in 2013 to recapitalise losses from Greek Govt bond PSI (private sector involvement). The sector is now 35-70% state owned.

Greek Banks Presently Greek banks rank as some of the least profitable in Europe (ROA <0.5%, ROE 2-2.5%). Looking forward to 2018 they should trade at least in line with European banks. Sector consolidation, NC asset disposal, rapid=y declining cost of wholesale funds and efficiency savings will all contribut= to that. The Sector comprises Alpha Bank, Eurobank, Nat Bk of Greece and Piraeus. The are no longer distressed and trade broadly in-line with Europe=n peers in terms of EPS and TBV multiples.

## Alpha Bank (ALPHA GA)

Of the three, Alpha Bank looks the most interesting. It trades at a discoun= to the others and has less complex re-structuring. A recent capital raise increased CT1 to 12%. Most analysts prefer Alpha Bank to its peers for these reasons.

Alpha Bank Stock Price

Very recent analyst target prices for Alpha Bank are largely above the current price

## Warrants

A year ago the bank issued 4.5year call warrants, exercisable every six months into the stock at a price schedule (appendix A) that varies over time

## Warrants (cont.)

the relationship between the warrant (which settles ph=sically) and the stock price is: [current stock price (0.69) - next exercise price of w=rrant (0.4686)] x leverage ratio 7.408 = intrinsic warrant px = 1.64.

Now, the warrant is offered at 1.83. The value here is that the difference between 1.83 and 1.64, in my view, doesnt compensate for the optionality you get holding the warrant compared to just holding the stock.

Warrant price

Were the stock to rise 10% over the next month the warrant would rise in value from 1.83 by approx 22%. Conversely if the stock were to fall the warrants would also fall - but its unlikely the warrant price trades at zero anytime soon due to the 3.5years of remaining time value.

The warrants are quoted several thousand up 1tick wide on exchange.<=ont face="sans-serif">

Any qns shout.=br>
Appendix A

OF 7.408683070 <tel:7.408683070> . ISSUE AMOUNT: 1,233,503,482. STEP-UP STRIKE:0.4488 12/10/2013, 0.4576 06/10/2014, 0.4686 12/10/2014, 0.4796 06/10/2014, 0.4928 12/10/2015,=/font>
0.506 06/10/2016, 0.5214 12/10/2016, 0.5368 06/10/2017, 0.5544 12/10/2017</=ont>

Nav

Nav Gupta

Managing Director

Deutsche Bank AG, Filiale London
Deutsche Asset & Wealth Management
105/108 Old Broad St (Pinners Hall), EC2N lEN London, United Kingdom
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Email <mailto

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## Warrants (cont.)

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