PZU subordinated bonds

Location:

Poland

Project number:

49135

Business sector:

Insurance, Pension, Mutual Funds

Notice type:

Private

Environmental category:

FI

Target board date:

07 Jun 2017

Status:

Signed

PSD disclosed:

30 Jun 2017

Translated version of this PSD: Polish

Project Description

Investment in Polish zloty-denominated subordinated bonds in an amount of PLN 300 million (EUR 71 million) as part of a total aggregate issuance of PLN 2.25 billion (EUR 533 million) issued by Powszechny Zakład Ubezpieczeń S.A. (“PZU”), a public company incorporated in Poland and the leading insurance group in Central and Eastern Europe

Project Objectives

PZU will allocate at least 60% of the EBRD bond proceeds towards commercial real estate projects in Poland that meet eligibility criteria for green buildings under the EBRD Green Economy Transition Approach. The project will enable PZU to directly invest in commercial property assets that are designed to high sustainability standards or will benefit from sustainability improvements, making it the first insurance company in the Bank’s countries of operation to derive transition impact from green and sustainable investments. The project supports PZU in raising qualifying capital through the issuance of the first subordinated bond by an insurance company in Poland, contributing to the development of the local debt capital market.

Transition Impact

The transition impact is derived from:

i. Setting standards for corporate governance and business conduct for the insurance market in the CEE region by demonstrating that investments into green property projects via an insurance company’s investment portfolio is a viable business activity, targeting tangible energy efficiency and sustainability improvements.

ii. Transfer of skills: the EBRD will leverage its experience in sustainable real estate and commercial and residential building development projects, investment funds and financing facilities with banks and apply similar eligibility criteria for the policies of insurance companies’ investment activities and portfolios.

iii. Development of the Polish capital market: demonstrating the viability of a Solvency II subordinated bond issue on the Polish capital market for the first time to both local debt capital market investors as well as Polish insurance companies that may follow PZU to improve their capital position by issuance of the same instrument.

Client Information

PZU S.A.

Powszechny Zakład Ubezpieczeń comprising primarily of PZU S.A. (the parent company with non-life operations) and PZU Życie S.A. (life insurance, 100% subsidiary). The PZU Group is Poland's largest financial services company and leading insurance group in Central and Eastern Europe and listed on the Warsaw Stock Exchange with a market capitalization of PLN 38.7bn (EUR 9.2bn) as of June 2017, consolidated gross written premiums of PLN 20.2bn (EUR 4.6bn) and total assets of PLN 125.3bn (EUR 28.3bn) in 2016. The State Treasury is the single largest shareholder with 34.2% of total capital.

EBRD Finance Summary

PLN 300 million (EUR 71 million equivalent)

Total Project Cost

PLN 2.25 billion (EUR 533 million equivalent)

Environmental and Social Summary

Categorised FI. PZU will be required to comply with EBRD’s Performance Requirements 2, 4 and 9, implement EBRD’s E&S Risk Management Procedures for the Insurance Sector and to submit Annual E&S Reports to the Bank. For real estate investments a green building certificate should be in place and confirmation should be provided to the EBRD. Certification can be acquired from internationally recognised green building certification programmes such as  LEED “Silver” (Leadership in Energy and Environmental Design), BREEAM “Good” (Building Re-search Establishment’s Environmental Assessment Method) or corresponding levels of other internationally recognised schemes.

Technical Cooperation

None.

Company Contact Information

Piotr Wiśniewski

Investor Relations

Tel: +48 22 582 26 23

E-mail: ir@pzu.pl

www.pzu.pl

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