Debt financing

On 3rd July 2014, PZU Finance AB (a 100% subsidiary of PZU) issued five-year eurobonds for the amount of EUR 500 million1. The redemption of the bonds will take place on 3rd July 2019.

The liabilities arising from the bonds were secured by a guarantee granted by PZU. The issue price of one bond with a nominal value of EUR 100,000 amounted to EUR 99,407. Standard & Poor’s awarded these bonds a senior unsecured rating at “A-”, that is, an investment grade.

The bonds were released on the regulated market of the Irish Stock Exchange (Official List, Main Securities Market) on the basis of a prospectus approved by the Central Bank of Ireland. From 22nd December 2014 bonds have also been traded on the Warsaw Stock Exchange Catalyst ASO/Bondspot 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) 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. As at the issue date it was the lowest coupon obtained in the region of Central and Eastern Europe and the lowest margin in the region since 2007.

PZU eurobonds yield compared to Polish treasury eurobonds with matury date in 2019

PZU eurobonds yield compared to Polish treasury eurobonds with matury date in 2019

Source: Reuters

The issue of Eurobonds constituted the implementation of PZU Group’s investment strategy in the scope of the management of the matching of assets and liabilities denominated in euro.