Poland

This Thursday was Fat Thursday, a Polish equivalent of Pancake Day, celebrated by the consumption of doughnuts. But Poland’s Ministry of Finance fed socially responsible investors a different treat this year: €2bn of green bonds.

Poland is in the market for its most ambitious green bonds yet. It has opened books for two tranches of euro debt, hitting the 10 and 30 year maturity buckets.

PKO Bank Hipoteczny (PKO), Deutsche Pfandbriefbank (PBB) and Raiffeisenlandesbank NiederÖsterreich-Wien (RLB-NW) all found strong demand for their €500m covered bond deals this week.

A €5bn wall of demand chased a trio covered bonds issued on Monday by Société Générale, PKO Bank Hipoteczny and Deutsche Pfandbriefbank and showed that, after a shaky start to 2019, the market has now found form.

There was little in the way of emerging market bond issuance this week to set the tone for the usually busy month of September. Although mBank raised €500m of four year money, CEE-focused Atrium European Real Estate had yet to appear with a deal that had been planned for Thursday.

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mBank, a Polish financial institution, has hit the market with what will be the first euro benchmark from a CEEMEA borrower in over a month, taking what some investors believe is a cautious approach to reopening the market.

It has been a dreadful August in emerging markets, but borrowers still have cash to raise and, despite the violent swings in secondary market levels, investors will have cash to put to work when the UK bank holiday has passed.

Polish bank mBank is embarking on a roadshow to market the first euro denominated international public bond from the CEEMEA region in over a month, and the first since Turkey’s currency crisis triggered a wave of selling across emerging market debt.

Poland’s domestic bond market is not as big as participants would like it to be. It needs standardised documentation, they say, along with more ratings and the adoption of transparent, fixed rate coupons. Philip Moore reports.

Polish GDP impressed in the first quarter of 2018, growing 5.2% year-on-year, up from the 5.1% estimated, driven by higher consumption and investment in infrastructure co-financed by EU funds. Ukrainian migrants have also boosted GDP. But with proposed cuts to EU funding set to hit Poland hardest — at a cost of 1% of GDP a year from 2021, according to some estimates — the outlook is not so rosy. Virginia Furness reports.

The Republic of Poland has proved itself to be one of the most prudent and innovative borrowers in central and eastern Europe, leaving it well placed to navigate increasing volatility in global rates, while some less prepared issuers may run into funding difficulties. Virginia Furness reports.