Poland's PZU prepares next bond

Poland's PZU prepares next bond

Published: August 29, 2014

Polish insurance group plans to sell subordinated debt by the end of the year.

Polish insurance group PZU plans to sell subordinated debt later this year after its debut eurobond broke records last month.

The company raised €500mn (about US$660mn) in early July with its first international issuance. That bond priced with a coupon of 1.375%, a record low for a corporate issuer from Central & Eastern Europe. The previous record was set only a month earlier, when Polish energy company PGE issued a €500mn eurobond with a coupon of 1.625%.

That deal gave the company much-needed liquidity in euros following its recent acquisition of several Polish and Baltic assets from RSA Insurance Group, a €360mn deal. Now, with an eye to making further acquisitions soon, the company is preparing for another fundraising.

Przemysław Dąbrowski, PZU’s chief financial officer, tells EMEA Finance that the company aims to raise up to PLN3bn (about US$937mn) with a subordinated bond. The deal will again be denominated in euros and sold internationally – changes to the Polish pension system that have limited the involvement of private funds mean that there wouldn’t be enough demand for the paper in the domestic market, he adds.

Banks have yet to be mandated to run the deal, but Dąbrowski hopes the company will be in a position to issue in November or December, following its third-quarter results.