On 3 July 2014, PZU (via its subsidiary, PZU Finance AB (publ) emitted five-year eurobonds for the amount of EUR 500.000 thousand, with the redemption date of 3 July 2019. The issue price of one bond with a nominal value of EUR 100.000 amounted to EUR 99.407. The bonds were released on the regulated market of the Irish Stock Exchange on the basis of a prospectus approved by the Central Bank of Ireland. Standard & Poor's awarded these bonds a rating of “A-” for unsecured debt. Since 22 December 2014, bonds have also been traded on the Catalyst market.
The margin over mid-swap rate (the curve, which constitutes the average of the bid and ask curves for fixed-coupon bonds corresponding to the period of redemption of the bonds issued by PZU Finance AB (publ)) amounted to 85 bps, which resulted in the bond yield of 1.499%.
The bonds bear interest at a fixed interest rate of 1.375% per year and the coupon will be paid once a year.
The bonds have been classified as measured at amortized cost. The carrying amount of liabilities arising from the bonds amounted to PLN 2,127,527 thousand as at 31 December 2014. The fair value of this liability, estimated using a model, amounts to PLN 2,180,293 thousand.
|Undiscounted cash flows from the issued debt securities||31 December 2014|
|Up to 1 year||29,303|
|Over 1 year and up to 5 years||2,248,363|
The liabilities of PZU Finance AB (publ) arising from the bonds (including the obligation for payment of the nominal value of bonds and interest on the bonds) were secured with a guarantee provided by PZU to all bondholders. The maximum value of the guarantee was not specified and it expires upon the expiry of the claims of the bondholders towards PZU Finance AB (publ).