The first retail bond issue by PKN ORLEN
The yield on PKN ORLEN retail bonds can reach over 4% per year. Ultimately, the bonds' trading price and redemption price following a four-year period will be driven by rates calculated for six-month interest periods and a margin, as the bonds will bear interest at a floating rate. Today, the Company opened subscriptions for the first series of retail bonds offered to retail investors. The amount of the first series of bonds is PLN 200m. PKN ORLEN expects the proceeds from the entire bond issue programme to reach approximately PLN 1 billion.
The floating interest rate on the PKN ORLEN debt securities will be based on the 6M WIBOR plus a margin of 1.5% and will be payable on a semi-annual basis. Based on the currently prevailing WIBOR rates, the bonds’ yield is 4.20%. The redemption period will be four years. Investors will also be able to trade in the bonds on the Catalyst market of the Warsaw Stock Exchange.
The PKN ORLEN bonds have already been highly rated by Fitch Ratings. The bond series which is currently being offered has been assigned a high rating of BBB+. Fitch also indicated that PKN's international rating might be upgraded from BB+ to BBB- in the months to come. The analysts of Fitch Ratings viewed positively the excellent liquidity position of the Company, in particular the fact of maintaining debt and leverage at the optimum level as well as a well-thought-out, flexible investment policy adopted as part of the Company's strategy for 2013-2017.
"By issuing corporate bonds to retail investors we decided to leverage the Company's strong market position and our widely recognised brand, which make us a reliable and stable business partner worth investing in," says Jacek Krawiec, CEO and President of the PKN ORLEN Management Board. "Retail investors increasingly more often seek safe investments outside the universe of term deposits and savings accounts. If we also consider that Polish households hold assets worth more than PLN 1.3 trillion, with only some PLN 10 billion invested in bonds, it is obvious that our offering may be a good response to the market's current needs. It is an ideal proposal for individuals who expect returns with a high level of safety," added Mr Krawiec.
The issue price per bond will change over the duration of the offering and will depend on the day that a subscription order is made. The issue price will be PLN 100 on the first day of the offering and will increase by the amount of interest accrued as of the first day of the offering on the subsequent days.
PKN ORLEN's partners in the bond issue include institutions with significant experience in executing projects of similar size: UniCredit CAIB Poland S.A., Bank Pekao S.A. and Dom Maklerski PKO Banku Polskiego. These institutions offer both an extensive and conveniently located distribution network as well as experience in the execution of public offerings in the Polish market, including retail offerings. PKN ORLEN retail bonds will be available at over 1,000 outlets across Poland.
