Polish Development Fund sold bonds for PLN 16.3 billion

Today, the Polish Development Fund carried out a successful bond issue. The PFR's debut as a bond issuer is undoubtedly a success for the company, all the government institutions and the banks involved in the issue. It took place under the governmental programme Financial Shield of the Polish Development Fund of Companies and Employees. The PFR has gained the confidence of banks – bondholders and the State Treasury – in a properly applied fundraising mechanism. This is a good starting point for future emissions.

On Monday, the Polish Development Fund issued 4-year bonds with a nominal value of PLN 16.3 billion as part of a bond issue programme with a total value of up to PLN 100 billion. The issue was carried out in connection with the PFR being entrusted by the Council of Ministers, pursuant to Article 21a(1) of the Act on the system of development institutions and the Resolution of the Council of Ministers of 27.04.2020 on the implementation of the "Government Programme - the financial shield of the Polish Development Fund for small and medium-sized enterprises".

The issued bonds are secured by a State Treasury guarantee. All issued bonds were taken up by the bondholders who are banks.

The bonds shall bear interest on an annual basis at 1.375% and the maturity date set for 29 March 2024. Their profitability was determined on the basis of the valuation of treasury bonds with a similar maturity date increased by bank tax and a margin for the risk of lower liquidity than treasury bonds. The structure of the yield components is similar to the bonds issued by BGK bank.

The funds raised by the PFR from the issue will be used in full for the implementation of the government's financial support programme for entrepreneurs in connection with the negative effects of COVID-19.
The legal basis for the issuance of bonds by PFR is Article 21aa of the Act on the system of development institutions.

The successful and very popular Monday issue was the debut of the PFR as a bond issuer.
The success of the first bond issue is a good forecast for the implementation of the government programme, counteracting the negative effects of COVID-19, which is thus entering the implementation phase. The demand for our bonds turned out to be greater than we assumed, so instead of the planned PLN 15 billion, we obtained over PLN 16 billion from their issue. The positive reaction of the market means that banks and investors trust the PFR as an entity capable of implementing the government programme. We have been working very intensively for several weeks now, knowing that fast and effective action may be crucial for the future of many Polish companies and their employees. I perceive the success of the issue not only in purely market terms – I believe it is also an expression of the financial sector's understanding of the enormous challenges faced by Polish companies. I would like to thank all the people, from many different institutions, who made this issue a success

- said Paweł Borys, President of the Management Board of the PFR.

Taking into account the pace of preparatory works, the scale of the issue, lack of space for error and at the same time lack of experience of the market with the PFR in the role of issuer, we considered a 'trial' issue on a private placement basis, which would allow us to probe the market. Eventually, the decision was made that we would immediately issue a large tranche. We managed to win the trust of investors, which translated into exceeding the PLN 15 billion threshold we had assumed. We have obtained a good price, comparable to similar paper securities issued on the market. It's also a success. We will certainly work on expanding the group of bondholders in subsequent issues. Thank you to our dealers – the banks PKO BP and Pekao S.A. for a successful debut,

- said Bartłomiej Pawlak, Vice-President of the Management Board of the PFR, responsible for issuing bonds.

As part of the government's programme, the PFR plans to support the sector of micro, small and medium-sized enterprises and large companies with funds of up to PLN 100 billion. PFR will implement the programme in cooperation with commercial and cooperative banks, which will play a key role in the distribution of funds obtained by the PFR for its implementation.
Detailed information is available on the website.