Poland returns with bonds as downgrade shock ebbs



Poland has returned to the international debt market with a reopening of the 20-year euro-denominated bond it sold in January, days before a shock credit rating downgrade left investors nursing losses on Polish assets.
The country is offering bonds maturing in January 2036 with guidance of about 130 basis points above midswaps, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. That’s 30 basis points more than when Poldan sold €750 million of the debt on Jan. 11.
Four days later, Standard & Poor’s handed Poland its first credit-rating cut since the fall of communism, saying its new government led by the Law & Justice party was imperiling the independence of the country’s institutions. While the move sent markets reeling, Polish assets have recovered since, supported by European Central Bank stimulus and easy monetary policy in the U.S.
“The overall market sentiment is favorable for issuing and they can lock a low yield,” said Anton Hauser, who helps oversee $2 billion of emerging-market fixed-income assets at Erste Asset Management, in an e-mail. “We are in a risk-on sentiment, the ECB bond buying program will help in an indirect way.” Hauser, who was among fund managers who bought Polish bonds after the downgrade, said he is considering buying into the latest issue.
Poland last tapped international investors on March 30 when it sold $1.75 billion in 10-year notes.
Deputy Finance Minister Piotr Nowak confirmed Poland is selling 20-year euro-denominated bonds in a text message sent to Bloomberg News on Wednesday. The country has mandated Citigroup Inc., HSBC Holdings Plc, ING Groep NV, Societe Generale SA and UniCredit SpA to manage the sale, the Finance Ministry said in an e-mailed statement.

Leave a Reply

Send this to a friend