With the second euro-denominated covered bond issuance PKO Bank Hipoteczny builds its strategic position as a regular issuer on the European market

PKO Bank Hipoteczny offered to institutional investors covered bonds with a nominal value of EUR 500 million. Spread over EUR Mid-SWAPs of 27 bps was set after the official bookbuilding process which was conducted on 23rd of March 2017. The bonds mature on 24th January 2023.

Rafał Kozłowski, CEO of PKO Bank Hipoteczny, said: Consistently, we are diversifying funding sources of the PKO Bank Polski Group, and we are extending their maturities. We successfully completed the bookbuilding of the second international benchmark size issuance of euro-denominated covered bonds. At the same time we expanded the group of investors as well as the number of countries they come from. In such a way we confirmed our strategy of being a regular covered bond issuer on the European market.

In preparation for the trade, PKO Bank Hipoteczny met with around 50 investors during a series of fixed income investor meetings across Europe, lasting from 14th of March 2017 to 17th of March 2017. The meetings were arranged by LBBW, PKO Bank Polski, Santander, SG CIB and UniCredit. The issuer visited several financial centers in Benelux, France, Germany, Italy, Poland and the UK.

Only five months after the debut offer, PKO Bank Hipoteczny managed to ensure a high quality order book which was 1.5 times oversubscribed, the demand in the second transaction coming from over 70 investors from 16 countries, the main shares shown below.

On the 28th of September 2016 the Commission de Surveillance du Secteur Financier in Luxembourg approved the Base Prospectus for PKO Bank Hipoteczny's European covered bond programme. The programme stipulates that the covered bonds may be admitted to trading on the stock exchanges in Luxembourg and Warsaw.

In 2016 PKO Bank Hipoteczny was the most active issuer of covered bonds in Poland. It conducted Poland's first ever benchmark issue of Euro-denominated covered bonds with a nominal value of 500 million euro, as well as two benchmark Polish zloty-denominated covered bond issues with a total value of 1 billion zloty.

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PKO Bank Hipoteczny is 100% owned by PKO Bank Polski, Poland's largest bank, and specialises in zloty-denominated housing loans. PKO Bank Hipoteczny's main purpose is to secure long-term financing by issuing covered bonds. In August 2014, PKO Bank Polski received approval from Poland's Financial Supervision Authority to set up a mortgage bank, which began operating in April 2015.