Poland in $1bn offer

Poland sold $1bn of 10-year bonds on Wednesday in the country’s first return to the global dollar market in two years.

The 2015 notes were priced to yield 12 basis points above the 10-year mid-swap rate, with a coupon of 5 per cent. The pricing was at the tight end of the 12-14bp price guidance given to investors.

Poland’s last foray into the global dollar market was in October 2003. Since then, the country has joined the European Union, and its yields have fallen significantly. But with an A2 credit rating by Moody’s Investors Service and two notches lower at BBB+ by Standard & Poor’s, Polish debt still pays a premium to many other European borrowers.

“With a relatively flat dollar yield curve at the moment, Poland offered sovereign investment grade risk at a spread above mid-swaps and a 5 per cent coupon, which proved attractive to a lot of investors,” said Edward Mizuhara of Lehman Brothers, which managed the sale with JPMorgan.

Reverse inquiries from mainly US investors also led the country to issue $100m of 30-year notes. Investors were paid 17bp for taking 30-year exposure to Poland, compared with the 10-year issue.

Investors will get another chance to invest in 10-year dollar global bonds on Thursday, when the European Investment Bank is expected to sell a $1bn bond.

The AAA-rated financing vehicle of the EU selected Citigroup, HSBC and JPMorgan to lead-manage the sale.

On Wednesday, the EIB raised the size of its Turkish lira-denominated March 2008 issue by TL25m ($18.7m) to take the outstanding amount to TL180m.

RBC Capital Markets managed the sale of the 13 per cent notes.

(Source: FT.com)

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