PKN ORLEN Series B Bonds Already in Investors’ Portfolios
The Series B bonds have been subscribed for by over 2,000 investors, three times more than the number interested in buying the Series A bonds. The average purchase price was close to PLN 100,000. According to statistics, individual investors accounted for more than 90% of all subscription orders for the second series of PKN ORLEN retail bonds.
The entire issue of Series B bonds was subscribed for before the subscription’s scheduled closing date. Given that the limit set for the offer of Series B bonds was exceeded, 100% will be allotted only in the case of orders placed from June 3rd to June 10th, while orders placed on June 11th and June 12th will be reduced – the average allotment rate will be 66.67%, which means that the orders placed on those days will be reduced by an average of 30.33%. Another PLN 200m issue of debt securities was launched in response to the enormous interest for the first series of the bonds, which were oversubscribed in less than two days. PKN ORLEN expects the proceeds from the entire bond issue programme to reach approximately PLN 1bn.
The second issue attracted investors with varying resources. Over 17% of all subscribers quite markedly exceeded the average purchase price, but for the remaining, nearly 1,700 buyers, the average price was PLN 2,700. 91% of the Series B bonds were subscribed for by natural persons, with 8.97% invested in by cooperative banks.
“In addition to the unquestionable success of the two issues, the statistics show that one of the objectives behind our programme, which was to stimulate the Polish retail bond market, was largely achieved as soon as the second series of PKN ORLEN bonds was launched. Our debt securities have been bought by both long-standing investors on the capital and bank deposit markets, who tend to invest really large sums of money, and by the smallest investors, who have entrusted their savings to us, demonstrating confidence in the stability and reputation of ORLEN,” commented Jacek Krawiec, CEO of PKN ORLEN.
The PKN ORLEN retail bond programme is an innovative solution on the Polish financial market, and an entirely new addition to the Company's portfolio. As currently estimated, the total fixed costs of the programme, including costs of advice as well as preparation and publication of the prospectus, amount to some PLN 2.5m. The cost of promotion and other variable costs, which the Company will disclose once they are settled after the programme is closed, will not significantly drive up the total cost of financing.
With a variable interest rate based on 6M WIBOR plus a margin of 1.5%, and interest paid out every six months, investors seem to have found the offer of Series A and B bonds attractive and competitive. The debt securities will be redeemed after four years, counting from the issue date of each series. Before the redemption date, investors will also be able to trade in the bonds on the Catalyst market of the Warsaw Stock Exchange.
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, as well as the following distributors: Centralny Dom Maklerski Pekao SA, Dom Maklerski Pekao, Dom Maklerski PKO Banku Polskiego and Dom Inwestycyjny Xelion. From among all the distribution channels made available by the Banks, the Internet and telephone were by far the most popular.
