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Poland Sells 1.5 Billion Euros of Bonds as Yields Near Low

Poland carried out its first public sale of euro-denominated bonds in five months as yields decline on European attempts to contain the debt crisis.

The government sold 1.5 billion euros ($1.9 billion) of Eurobonds due on Jan. 19, 2023 at 195 basis points above mid- swaps, according to a banker involved in the transaction, who declined to be identified because the terms weren’t yet public.

The spread is the lowest at a public sale by Poland in more than a year, according to data compiled by Bloomberg. Yields on Poland’s existing Eurobonds due in 2022 fell four basis points to 3.69 percent at 5:51 p.m. in Warsaw, within seven basis points of a record-low on June 7, the data show.

Poland is coming to the market after meeting 70 percent of this year’s financing needs by May 31, opting to sell more debt early in case the neighboring euro area crisis escalates and increases borrowing costs for the European Union’s biggest eastern economy. Polish debt prices rose after European Central Bank President Mario Draghi said on June 6 that his bank may do more to stimulate the stalled euro region economy.

“The ministry is making the most of the improved sentiment on the market,” Miroslaw Budzicki, fixed-income analyst at PKO Bank Polski SA, the country’s largest lender, said by phone from Warsaw.

Smallest Spread

The spread on the 3.75 percent coupon Eurobonds is the smallest in a public sale since the country sold 2021 bonds at 150 basis points, or 1.5 percentage point, above mid-swaps in January 2011, data compiled by Bloomberg show.

Poland sold 750 million euro of bonds due in March 2017 at 237 basis points above mid-swaps on Jan. 10, Finance Ministry data show. It also sold 527 million euros in registered bonds due on Feb. 24, 2022 on Feb. 10 at 242 basis points above mid- swaps, according to the ministry.

Poland hired Barclays Plc, Citigroup Inc, Erste Group Bank AG and ING Groep NV to manage the sale of “10-year benchmark bonds in euros,” Malgorzata Brzoza, a spokeswoman for the Finance Ministry, said in a statement.

To contact the reporter responsible for this story: Piotr Skolimowski at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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