PKN ORLEN to issue bonds bearing lowest interest rate in operating history

Having finished the bookbuilding process, PKN ORLEN will issue PLN 1bn worth of bonds with a margin of 90 basis points above the 6-month WIBOR. The company has obtained very favourable funding terms – the interest rate is the lowest in its operating history and the margin is the lowest since the 2008 financial crisis. The transaction will also be Central Europe’s first ever issuance of corporate bonds ​linked to an MSCI ESG Rating, with the interest rate based on an independent environmental, social and governance (ESG) rating. The proceeds will be applied to fund some of the capital projects undertaken to advance the company’s 2050 carbon neutrality strategy.

Targeting qualified investors, the bond issuance attracted strong interest from capital market participants. Fifty-four investors submitted subscription orders for PLN 2.2bn worth of bonds, which means the issue was oversubscribed more than two-fold.

‘We received strong investor demand despite an unstable period experienced by the capital market in the wake of the COVID-19 pandemic. It is a clear sign for us that the development directions set and business efforts taken by PKN ORLEN are right. This is further confirmed by the price of our shares, which has surged almost 20% since the announcement of the new strategy and over 60% since the October low. We are proud to be the first company in Central Europe to issue bonds ​linked to an MSCI ESG Rating. We participate actively in the process of the energy transition, considering the process as a challenge nevertheless, first and foremost, as an opportunity to move forward on the path of sustainable growth. In line with our long-term strategy, we pursue ambitious projects that will help us become a net zero company by 2050. We are a reliable and stable partner, we run a forward-looking business, therefore some of our investments will be funded from sustainability bonds,’ explains Daniel Obajtek, President of the PKN ORLEN Management Board.

PKN ORLEN will issue five-year bearer bonds under the agreement of the company’s existing national bonds programme. The bonds will be introduced to trading in the alternative trading system operated by the WSE. The issue will feature ESG elements. The margin will depend on the company’s MSCI ESG rating.

Sustainability and corporate responsibility are key aspects of the company’s carbon neutrality strategy until 2050. To further this strategic vision, at the beginning of September 2020 PKN ORLEN stated its commitment to reducing CO2 emissions from its existing refining and petrochemical assets by 20% and from electricity generation by 33% per MWh by 2030. Projects implemented under the carbon neutrality strategy are expected to be partly financed through green and sustainable bonds issued by PKN ORLEN on the European capital market.