DEAL: Poland's first international covered bonds

Author: Lizzie Meager | Published: 13 Oct 2016
Poland updated its covered bond law late last year
Polish mortgage bank PKO Bank Hipoteczny has established the country’s first ever international covered bond programme, opening up a brand new market for both issuers and investors.

The €4 billion deal, which is on roadshow this week, is comprised of Polish residential mortgage loans.

The bank’s CEO Rafał Kozlowski told IFLR this week that it plans to become a frequent issuer in this area. “The PKO Group was predominantly funding long-term instruments such as mortgage loans with short term deposits, so came to the decision that a covered bond would mitigate that well,” he said.

Lawyers working on the deal said the main challenge was producing a standardised product that would be eligible for clearing through Euroclear and Clearstream.

“Making...