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EBRD invests €54 million in first Polish mortgage bank
Deal with Rheinhyp-BRE Hipoteczny will support mortgage market
Poland's budding mortgage sector will receive a boost under a €54 million-equivalent agreement between the EBRD and Rheinhyp-BRE Bank Hipoteczny (RHB), the first licensed mortgage bank in Poland.
The Bank will buy up to $25 million of US dollar-denominated, and €25 million of euro-denominated mortgage bonds from RHB over a three-year period. BRE Bank S.A. will act as arranger, dealer and depositary for each of the bond issues. Noreen Doyle, First Vice President at the EBRD signed the agreement today in Warsaw.
Ms Doyle said the agreement underscores the Bank's commitment to supporting the development of the mortgage market in Poland. By supporting the issuance of mortgage bonds, the EBRD is helping RHB to make more funds available for long-term, lower cost mortgages. The creation of a thriving mortgage market is an important element for the country's ongoing development, and important as Poland approaches accession to the European Union, Ms Doyle said.
In addition to supporting the continuing growth of RHB's commercial and residential mortgage portfolio in Poland, the EBRD investment should help ensure the success of the first privately placed EUR/USD-denominated mortgage bond in the country.
Piotr Cyburt, President of RHB's management board, agreed that the EBRD investment will contribute to the development of the mortgage bond market in Poland and added that it will support RHB in maintaining a leading position in the mortgage banking sector. He said the EBRD's engagement underscores the high level of safety characteristic to such mortgage bonds and should convince other potential investors to invest in the bonds - a new financial instrument in Poland.
RHB was created in 1999 and is equally owned by Rheinhyp-Rheinische Hypothekenbank AG and BRE Bank SA, which in turn are controlled by Germany's Commerzbank AG.
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The EBRD aims to foster the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. It is owned by 60 countries, the European Investment Bank and the European Community.
The EBRD holds its Annual Meeting in Bucharest, May 19-20.
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