Poland places €2bn worth of green bonds

By bne IntelliNews March 3, 2019

Poland sold a total of €2bn of euro-denominated green bonds on February 28, the ministry of finance said on March 1.

The placement of the bonds – proceeds from which go to the financing of environmentally friendly projects – was Poland’s third since 2016. Poland was also the first sovereign to have issued green debt although it is considered a laggard in terms of policymaking in such key issues like climate change, for example.

Investor demand came in at €4.8bn for the placement that consisted of two series.  Poland sold €1.5bn in green bonds maturing in March 2029 with demand at €3.5bn. The other series, maturing in March 2049, sold for €500mn with demand at €1.3bn.

The 10-year bond was priced at the level of 35bp over mid-swap rate, yielding 1.057% with annual coupon at 1%, the ministry said. The 30-year series was priced at 77 bp over mid-swaps, yielding 2.071% with annual coupon at 2%.

The lead managers and bookrunners on the transaction were Citi, ING, JPMorgan, Poland's largest bank, the state-controlled PKO BP, Santander, and Societe Generale.

The 10-year bonds were allocated to investors from France and Germany – who made 45% of all investors that participated in the offer – as well as Benelux, Poland, the UK, Switzerland, Austria, the Nordic countries, and to investors from the Middle East.

Most investors in the series were asset managers and banks – 74% of all investors taking part – and also insurance and pension companies, central banks and public institutions, and hedge funds.

The 30-year papers went to investors from Germany who constituted 45% of those buying, as well as France, the UK, Switzerland, Austria, and Benelux. In terms of investor type, asset managers and insurance and pension companies made 85% of the buyers, followed by banks, central banks and public institutions, and hedge funds.

The global market for green bonds grew 6% in 2018 to $167bn (€146.9bn), according to Moody’s. Global green bond issuance will hit $200bn this year, an increase of 20%, according to the rating agency. 

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