Debt financing of PZU, Bank Pekao and Alior Bank

PZU

PZU bonds: PLPZU0000037 bonds for a total of PLN 2.25 billion

On 30 June 2017, PZU effected the largest issue of subordinated bonds (in Polish zloty) in the history of the Polish financial sector. At the same time, it was the first issue in Poland complying with Solvency II requirements. The bonds with a nominal value of PLN 2.25 billion bear interest at WIBOR6M + 180 bps. The maturity date is 29 July 2027, or 10 years after issue with an early redemption option 5 years after the issue date.

The bonds are listed on the Catalyst ASO WSE/Bondspot.

The issue was effected with a view to supplementing PZU’s equity, following the acquisition of a 20% stake in Bank Pekao, in order to maintain the Solvency II ratio at a level not lower than 200%, as defined in the PZU Group’s Capital and Dividend Policy.

Alior Bank

Bond issues and redemptions in 2020 

In 2020, in respect of its own bonds, Alior Bank did not conduct any issue or early redemption operations. On 11 August 2020, Alior Bank redeemed PLN 250 million worth of its series J bonds at their final maturity date.

Approval of the base prospectus for a bond offering program of up to PLN 1.5 billion

On 4 May 2020, KNF approved Alior Bank’s base prospectus prepared in connection with:

• the program, to be offered in Poland, of unsecured bearer bonds (with a par value of at least PLN 100 each, up to a total maximum par value of PLN 1.5 billion), established by Alior Bank within the framework of its Multi-Annual Bond Issue Program, up to a total maximum par value of PLN 5 billion,
• its intention to apply for admission and floating of each series of bonds on a regulated market (main or parallel market) for debt securities operated by the Warsaw Stock Exchange or a regulated market for debt securities operated by BondSpot SA.

In accordance with the prospectus, Alior Bank may conduct public offerings of unsubordinated or subordinated bonds constituting Tier II equity instruments.

Bank Securities – approval of the base prospectus for the 2nd Issue Program of Bank Securities for up to PLN 5 billion

On 31 December 2020, KNF approved Alior Bank’s base prospectus prepared in connection with:

• the opening of the 2nd Issue Program, to be offered in the Republic of Poland, of unsecured bearer bank securities with a par value of at least PLN 100 each and up to a total maximum par value of PLN 5 billion, and
• its intention to apply for admission and floating of selected series of bank securities on a regulated market (main or parallel market) for securities operated by the Warsaw Stock Exchange.

In accordance with the prospectus, Alior Bank may conduct public offerings of interest-bearing or non-interest-bearing bank securities.

Bank Pekao

Covered bonds

Under the covered bonds program established in 2019, Pekao, acting through its subsidiary Pekao Bank Hipoteczny, issues long-term debt securities secured on its loan portfolio. The issue is uncapped in value. Pekao Bank Hipoteczny’s covered bonds have been rated by Fitch at A- with a stable outlook (1 notch above the rating for Pekao Bank Hipoteczny whose risk Fitch assesses at BBB+). The total liabilities of Pekao Bank Hipoteczny by virtue of covered bonds as at 31 December 2020 was PLN 1.47 billion. The liabilities by virtue of covered bonds with a maturity of up to 1 year account for 41%, from 1 to 3 years for 26% and from 3 to 5 years for 33% of the total par value.

Subordinated bonds

The Bank did not conduct any subordinated bond issues in 2020.

Other unsecured bonds

The Pekao Group’s various entities conduct programs to issue unsecured bonds backed by Bank Pekao. These instruments are used to diversify funding sources; in particular, they elevate the percentage of the Bank’s subsidiaries’ assets funded directly from the wholesale market.

In 2020, Pekao Bank Hipoteczny held 6 bond issues under the bond issue program of up to PLN 1 billion for a total amount of PLN 710 million with maturities from 4 months to 2 years.

Regularly renewed securities with maturities of up to 1 year are the most prevalent among the issues conducted by Pekao Leasing (issue program of PLN 3 billion) and Pekao Faktoring (issue program of PLN 5 billion). The total liabilities under these two entities’ issues as at 31 December 2020 were PLN 6.24 billion.