On January 8th The Ministry of Finance successfully began the process of financing this year's borrowing needs of the state budget by placing 5- and 10-year benchmark bonds on the euro market with a total nominal value of EUR 3.25bn.

Investors once again confirmed their confidence in the fundamentals of Polish economy – the bonds offering was met with strong investor demand exceeding EUR 12bn.

The 5-year bond with a nominal amount EUR 2bn maturing on January 15, 2031 was priced at the level of 43 basis points over mid-swap rate, yielding 2.964% with annual coupon of 2.875%.

The structure of buyers was diversified. The 5-year were allocated to investors from: United Kingdom & Ireland (33%), Nordics (15%), Benelux (13%), United States (11%), Germany & Austria (7%), Switzerland (6%), France (6%), Southern Europe (2%) and others (7%).

In terms of investor type, the buyers group of 5-year bonds included: investment funds (57%), central banks and public institutions (24%), hedge funds (9%), insurance companies and pensions funds (6%), banks (3%) and other institutions (1%).

The 10-year bond with a nominal amount EUR 1.25bn maturing on June 15, 2036 was priced at the level of 83 basis points over mid-swap rate, yielding 3.739% with annual coupon of 3.625%.

The structure of buyers was diversified. The 10-year were allocated to investors from: United Kingdom & Ireland (27%), Germany & Austria (17%), United States (14%), Nordics (14%), France (6%), Benelux (6%), Switzerland (3%), Southern Europe (2%) and others (11%).

In terms of investor type, the buyers group of 10-year bonds included: investment funds (45%), hedge funds (18%), central banks and public institutions (17%), insurance companies and pension funds (12%), banks (6%) and other institutions (2%).

The issue was executed under the Republic of Poland’s Euro Medium Term Note (EMTN) Programme. The lead managers on the transaction were BNP Paribas, Commerzbank AG, Deutsche Bank AG and ING Bank N.V.