Poland Returns to Foreign Bonds With 1 Billion-Euro Offering

Poland is selling 1 billion euros ($1.3 billion) of six-year bonds today as it seeks to finance half of this year’s borrowing needs by the end of March.

The notes maturing in 2019 may be priced to yield 65 basis points above the benchmark mid-swap rate, according to a banker with knowledge of the plans, who asked not to be identified as the sale isn’t completed. The initial guidance was 65-70 basis points, the banker said. BNP Paribas SA, HSBC Holdings Plc and UniCredit SpA are managing the deal, the Finance Ministry said on its website.

The European Union’s biggest eastern economy is returning to international debt markets after selling a record $12.1 billion in foreign-currency bonds last year, the biggest amount for a sovereign after China, according to data compiled by Bloomberg. Poland, which seeks to finance this year’s borrowing requirement early to protect against an escalation in the euro region’s crisis, last sold 10-year notes in euros in November.

“We can carry out such a sale because of interest for our bonds from foreign investors as well as the limited size of our offer,” Deputy Finance Minister Wojciech Kowalczyk said in an e-mailed statement today.

The extra yield on Poland’s euro bonds due in June 2018 over the mid-swap rate dropped to a record low of 54 basis points last week from an average of 75 in December, data compiled by Bloomberg show. Its 2020 euro notes trade at a yield 89 basis points above mid-swaps.

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