Greece on Monday set the terms for the recapitalization of the country’s lenders with banks to issue common shares, convertible bonds and warrants to reach international capital requirements, the Finance Ministry said. Greek bank shares plunged.

Greek lenders will issue common shares to achieve a core Tier 1 capital ratio, a measure of financial strength, of 6 percent, the Athens-based ministry said in an e-mailed statement. Existing preference shares issued under a 2008 law won’t be included in the calculation, the ministry said.

Greek banks need fresh capital after sustaining losses on government bonds in the country’s debt swap, the biggest sovereign restructuring in history. Greece is waiting for final clearance from international creditors to receive its next loan payment of 31.5 billion euros ($40.1 billion), designed primarily to recapitalize the banks.

Shares will be offered at a discount of at least 50 percent from the average price over the 50 trading days before the sale, according to the statement. The convertible bonds and warrants will be used to boost capital, lifting the core Tier 1 ratio to a minimum level of 9 percent, the ministry said.

National Bank of Greece SA, the country’s largest lender, plunged 14 percent to 1.51 euros at the close of trading in Athens. Alpha Bank SA dropped 14 percent to 1.56 euros while Eurobank Ergasias SA fell 17 percent to 74.3 euro cents. Piraeus Bank SA dropped 14 percent to 37.5 euro cents.

Under the plan, the bonds will be converted to shares after five years and will carry an annual interest rate of 7 percent, which will increase by half a percentage point every year to 9.5 percent, according to the statement.

Banks will issue warrants to private investors who participate in the capital increase as long as 10 percent of the total is covered by the private sector, the ministry said.

The warrants will be used to buy shares from the Hellenic Financial Stability Fund, which will underwrite the bank share sales. The fund will waive its voting rights if private investors cover 10 percent of the issue. Greece’s four largest banks received 18 billion euros from the fund in May.