PKO Bank Hipoteczny bonds

Location:

Poland

Project number:

48517

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

25 May 2016

Status:

Signed

PSD disclosed:

23 Jun 2016

Translated version of this PSD: Polish

Project Description

The EBRD has invested PLN 80 million (approximately € 18.1 million equivalent) in the PLN denominated benchmark covered bond issue by PKO Bank Hipoteczny S.A. (PKO BH). This is the second covered bond issue by PKO BH under the new covered bond legislation that entered into force on 1 January 2016. The Project was approved under the Polish Financial Institutions Debt Capital Market Framework launched in December 2013 and extended further in December 2014. The Project is a follow-on project to the EUR 5 million investment (approx. PLN 21.5 million) in covered bonds issued by PKO BH in April 2016 (total amount PLN 500 million) is the first covered bond issue on the Polish market after the new legislative changes.

Project Objectives

The covered bond issue reduces the maturity mismatch of PKO BH's balance sheet, enhances and diversifies PKO Bank Polski S.A. Group's financing structure by providing access to long-term funding for its mortgage loan portfolio. The covered bond issue also provides the financing base to support sustainable mortgage lending in Poland, while the investors enjoy enhanced levels of security and transparency as compared to a standard Mortgage Backed Security.

Transition Impact

The transition impact is derived from:

i. capital market development and expansion: the proposed covered bond issuance will add to the build-up of critical mass of the outstanding Polish debt capital market needed to create pricing benchmarks, build a yield curve, develop market liquidity, and attract institutional investors.

ii. demonstration of balance sheet restructuring towards longer term liabilities which will match long term assets.

iii. demonstration of high standards for transparency and reporting.

Client Information

PKO BANK HIPOTECZNY SA

PKO BH is one of three mortgage banks operating in Poland, specialising in mortgage lending to individual customers. PKO BH, which started operations on 1 April 2015, is a 100 per cent subsidiary of Powszechna Kasa Oszczidnoici Bank Polski S.A. (PKO BP), the largest commercial bank in Poland.

EBRD Finance Summary

EUR 130,818,218.00

EUR 130 million envelope for EBRD's investments in PKO BH's cover bonds. The investment in the PLN-denominated benchmark covered bond issued by PKO BH in June 2016 was made in the amount of PLN 80 million (approximately € 18.1 million equivalent).

Total Project Cost

EUR 630,039,801.00

Up to aprox. EUR 626 million

Environmental and Social Summary

Categorised FI. PKO BH will be expected to comply with EBRD's Performance Requirements 2, 4 and 9, implement EBRD's E&S Risk Management Procedures for Mortgage Lending and submit Annual Environmental and Social Reports to the Bank. PKO BH should complete the E&S due diligence questionnaire and return it to EBRD for review to assess compliance with the PRs.

Technical Cooperation

None.

Company Contact Information

Malgorzata Dlubak
Malgorzata.Dlubak@pkobh.pl
00 48 22 521 5781
0048 22 521 5781

http://www.pkobh.pl/
PKO Bank Hipoteczny Spólka Akcyjna, 17 Jerzego Waszyngtona Street, 81-342 Gdynia, Poland

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