PKO Bank Hipoteczny’s Covered Bond Listing on Luxembourg Stock Exchange

2016-10-25

PKO Bank Hipoteczny offered to institutional investors covered bonds with a total size of EUR 500 million.
PKO Bank Hipoteczny’s covered bonds started listing on the Luxembourg Stock Exchange (Bourse de Luxembourg) on 24 October 2016.

PKO Bank Hipoteczny’s covered bonds began listing on the Luxembourg Stock Exchange (Bourse de Luxembourg)on 24 October 2016. PKO Bank Hipoteczny offered to institutional investors covered bonds with a total amount of EUR 500 million and a fixed yield of 0.178 percent following pricing of the transaction on 17 October 2016. The tenor was set at 5 years and 8 months.

PKO Bank Hipoteczny’s covered bonds were issued on the basis of Covered Bonds Programme approved by the Commission de Surveillance du Secteur Financier in Luxembourg on 28 September 2016. The programme amount is EUR 4 billion and the minimum denomination of covered bonds is EUR 100,000. Under the programme, PKO Bank Hipoteczny S.A. issued EUR 500 million covered bonds, which in addition to their listing on the Luxembourg Stock Exchange will be also listed on the Warsaw Stock Exchange.

Rafał Kozłowski, CEO of PKO Bank Hipoteczny, said: “This October, PKO Bank Hipoteczny has entered the international market with euro-denominated covered bonds. This is the first ever international benchmark issuance of covered bonds emanating from Poland. We are proud that our offer was met with such great interest by foreign investors. Thanks to this issue, PKO Bank Polski Group will get funding at a fixed interest rate for a period of nearly 6 years.”

During the bookbuilding process, over 90 investors made orders for PKO Bank Hipoteczny’s covered bonds totaling ca EUR 1.5 billion, with a book approximately 3 times oversubscribed. Among the institutions that acquired the covered bonds were investors from Germany (46%), Nordics (19%), CEE (10%), Austria (8%), UK (5%), Benelux (4%) and Switzerland (4%).

Covered bonds are a type of debt security backed by payments on mortgage loans. PKO Bank Hipoteczny’s euro-denominated covered bond programme was assigned an Aa3 long-term rating. The rating is in line with the Aa3 rating of the outstanding Polish-Zloty-denominated covered bonds of PKO Bank Hipoteczny and is the highest possible rating for Polish securities, which is capped by Poland’s country ceiling of Aa3.

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NOT FOR PUBLICATION OR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA.
1. These materials are not an offer of securities for sale in the United States. The securities to which these materials relate have not been registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will be no public offering of the securities in the United States.
2. The securities are not offered in Poland in a public offering within the meaning of the Act dated 29 July 2005 on Public Offerings.
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