• On 21st January 2019 PKO Bank Hipoteczny priced covered bonds worth EUR 500 million with a maturity date of 23rd November 2021.
  • Spread was set at 34 bps over EUR Mid-Swaps after a successful bookbuilding process was conducted on 21st January 2019. The bookbuilding process attracted over 70 investors that placed orders for PKO Bank Hipoteczny’s covered bonds resulting in a EUR 1,080 million orderbook.
  • The covered bonds will be issued on 28th January 2019 and will be listed on both the Luxembourg and Warsaw stock exchanges.

PKO Bank Hipoteczny offered covered bonds with a nominal value of EUR 500 million to a wide range of institutional investors. The bonds will mature on 23rd November 2021. A spread of 34 bps over EUR Mid-Swaps was set after the official bookbuilding process which was conducted on 21st January 2019.

Paulina Strugała, CEO of PKO Bank Hipoteczny, said: PKO Bank Hipoteczny began 2019 dynamically, successfully pricing its fifth benchmark issuance of euro-denominated covered bonds. Investors have once again demonstrated their faith in our credit story, for which I would like to thank them very much. Demand exceeded the value of offered covered bonds by more than twice.The Bank responded accurately to investors' relative value expectations and placed its covered bonds with a new issue premium of only 2 bp. The success of this issue, despite the challenging market backdrop, is the first step in achieving our ambitious goals for this year as well as an excellent reward for our extensive efforts and strengthens our position as the leading mortgage bank in Poland.

PKO Bank Hipoteczny is the largest mortgage bank and the most active issuer of covered bonds in Poland. As the sole issuer from Poland, from October 2016, the Bank regularly issues euro-denominated benchmark (worth at least EUR 500 million) covered bonds, which are marketed to institutional investors in the international market.

During the bookbuilding process, the orders for PKO Bank Hipoteczny’s covered bonds came from over 70 investors, representing 16 countries, and saw demand reach EUR 1,080 million. The issued amount of EUR 500 million was allocated to 66 investors from 16 countries.

Allocation by region












Southern Europe





Allocation by investor type


Asset Management

44.3 %



Insurance and pension funds


Central banks and official institutions


HSBC, LBBW, PKO Bank Polski, Raiffeisen Bank International AG, SG CIB and UniCredit acted as Joint Bookrunners on this transaction.

The current issue is the 18th conducted by the Bank (both EUR and PLN denominated). The value of outstanding covered bonds of PKO Bank Hipoteczny at the end of 2018 was PLN 12.8 billion.

Covered bonds are a type of bond secured by mortgage loans. The basis for the issue of covered bonds of PKO Bank Hipoteczny is only housing loans in Polish zlotys, which meet conservative criteria before being granted, both in the assessment of the borrower's creditworthiness and the valuation of real estate constituting.

Covered bonds from PKO Bank Hipoteczny - both denominated in PLN and in EUR - received a long-term rating of Aa3, assigned by Moody's Investors Service. The Bank is the only Polish issuer of covered bonds whose covered bonds has received such a high rating. The level of the assigned rating is the highest possible that can be achieved by Polish securities. Its limitation is the country ceiling in Poland at Aa3 level.

The Bank acquires loans for its portfolio through strategic cooperation with PKO Bank Polski, including the sale of housing loans through Poland’s largest network of branches, intermediaries and agencies, as well the purchase of debt portfolios from PKO Bank Polski.

On 5th September 2018 the Commission de Surveillance du Secteur Financier in Luxembourg approved the Base Prospectus for PKO Bank Hipoteczny’s international covered bond programme. The programme stipulates that the covered bonds may be admitted to trading on the stock exchanges in Luxembourg and Warsaw.

At the end of 2018, the European Central Bank ended the quantitative easing program and remained active on the European mortgage market but only as a reinvestor, which is one of the main reasons for the increase in margins on covered bonds. This increased the supply of mortgage bonds on the European market available to other investors, which was reflected in the higher margins. Last year, the European Central Bank reduced its share in investment in mortgage bonds three times: in March - from 50% to 40%, in April - from 40% to 30% and in September - from 30% to 10%.