FI Debt Capital Market Framework

Location:

Poland

Project number:

45949

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

10 Dec 2013

Status:

Board Approved

PSD disclosed:

19 Dec 2013

Sub-projects signed under this framework

Translated version of this PSD: Polish

Project Description

The EBRD approved a Financial Institutions Debt Capital Market Framework (the “Framework”) for the Bank to invest in medium to long-term negotiable senior instruments, issued by banks or non-bank financial institutions (“participating financial institutions” or “PFIs”) in Poland. These include instruments such as:

1. unsecured bonds and notes,

2. secured bonds and notes, including covered bonds, asset-guaranteed, and

3. structured finance products in the form of asset backed securitisations of PFIs’ portfolios within various asset classes such as auto loans; consumer loans; credit card receivables, lease receivables, residential mortgages, small businesses and SME loans.

The Framework is in line with the objectives of the Local Currency and Local Capital Market Development Initiative launched by EBRD in May 2010 and will contribute to:

(i) further developing the Polish capital market;

(ii) supporting the diversification of funding sources of the PFIs; and

(iii) improving the maturity structure of the balance sheet of the PFIs by extending the tenor of liabilities to better match the maturity of the underlying assets.

The FI Debt Capital Market Framework Extension follows the Poland Financial Institutions Debt Capital Market Framework approved by the Board of Directors on the 10th of December 2013 for an amount of EUR 250 million. The Framework Extension will consist of investments in medium to long term senior bonds and structured products, including covered bonds, issued by Participating Financial Institutions (“PFIs”) in Poland for a total amount of up to EUR 350 million to be made until end of 2017. The Framework Extension increases the total amount available under the Existing Framework to EUR 600 million.

Transition Impact

Transition impact is expected to derive from:

  • Market expansion - the Framework will contribute to building the critical mass of outstanding capital market instruments needed to develop market liquidity and attract institutional investors.
  • Demonstration of balance sheet restructuring - facilitating debt capital market instruments issuance by PFIs, in either local or foreign currency, will enable issuers to diversify funding sources and address asset-liability mismatches.
  • Demonstration of new form of finance - introducing the structured finance products increases the interaction with market participants and contributes to the dispersion of relevant knowledge and skills in the Polish investment community and to the establishment of a required servicing infrastructure.
  • Demonstrating standards - entering the bond and structured finance market will require issuers to meet high standards for transparency and reporting, and demonstrate to the market how Polish issuers can adopt and maintain such standards.

The expected transition impact of the projects derive from: (i) market expansion through building of critical mass of outstanding capital market instruments; (ii) demonstration of balance sheet restructuring through diversification of medium term funding sources of financial institutions in Poland ; and (iii) support new forms of banks’ finance, namely by introducing mortgage covered bonds under the expected new legislation.

The Client

The Framework will be available for commercial banks and non-bank financial institutions (“participating financial institutions”, “PFIs”) in Poland.

The Framework Extension will be available for commercial banks and non-bank financial institutions in Poland (PFIs).

EBRD Finance

EUR 250 million.

Medium to long term negotiable senior debt instruments issued by PFIs in Poland, including:

  1. Unsecured bonds and notes
  2. Secured bonds and notes, including covered bonds, asset guaranteed bonds and
  3. Structured Finance products in the form of asset backed securitisations (including sub-participation structures for mortgages) of PFIs’ portfolios within the following asset classes (senior tranches): auto loans, consumer loans, credit card receivables, lease receivables, residential mortgages, small business and SME loans and other similar asset classes.

Project Cost

Up to EUR 350 million for the Framework Extension increasing the total amount available under the Framework up to EUR 600 million.

Environmental Impact

Categorised FI. PFIs under the Polish FI Debt Capital Market Extension will be expected to comply with PRs 2 and 9, adhere to EBRD Environment and Social Exclusion and Referral List and submit Annual Environmental and Social Reports to the Bank.

Technical Cooperation

None.

Company Contact

Ines Rocha

+ 44 207 338 7980

 

Business opportunities

For business opportunities or procurement, contact the client company.

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