Orlen Ends Polish Company Bond Hiatus Raising 750 Million Euros

  • Bond is first corporate issue out of Poland since Sept. 2014
  • Seven-year notes priced at 250 basis points above midswaps

Poland’s biggest oil refiner PKN Orlen SA joined a rush of emerging-market bond issuers locking in borrowing costs before higher U.S. interest rates.

The company raised 750 million euros ($838 million) from seven-year euro-denominated bonds yielding 250 basis points more than the mid-swap rate. Marketing guidance suggested a spread of about 275 basis points, according to a person familiar with the matter not authorized to speak publicly and asked not to be named.

Orlen wants to diversify funding sources and take advantage of “attractive” costs of financing, it said two weeks ago in an e-mailed response to questions from Bloomberg News. Bond sales in dollars and euros climbed to $118 billion in the first two months of the quarter as accommodative policy in the U.S., stimulus measures in Europe and a rebound in oil bolstered appetite for higher-yielding debt. That window may close with policy makers at the Federal Reserve suggesting U.S. borrowing costs could rise as soon as this month or in July.

For a story on Orlen and the dearth of Polish issuance, click here.

Mol Nyrt., Hungary’s largest refiner with the same rating as Orlen, sold similar securities on April 21 at 248.2 basis points above midswaps. Czech railway operator Ceske Drahy AS and Global Ports Investments Plc, a Russian seaport operator, also tapped international markets in recent weeks.

PKN Orlen’s sale is the first Polish corporate bond since September 2014. The last deals out of the country were from property developer Ghelamco Invest Sp Zoo and chemical maker Synthos SA. The issuance drought came amid mounting political risk as the government pushed utilities to bailout coal mining companies and a surprise downgrade for the country in January from S&P Global Ratings.

Societe Generale SA and BNP Paribas SA are global coordinators on the transaction.

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