The Warsaw office of Hogan Lovells has advised Pekao Bank Hipoteczny on the issue of the public mortgage bonds.
According to Hogan Lovells, the issuance is the first of its type on the Polish market in the past five years. The total value of the August 30, 2018 issuance amounted to PLN 350 million, and the security pool consisted of receivables from loans granted to local government units.
The seven-year covered bonds were offered to institutional investors, and were jointly purchased by 24 entities, including investment funds (49%), open pension funds (30%), and insurance companies (21%).
The interest rate was determined as the sum of the WIBOR 3M reference rate plus a margin of 0.45%. Under the terms of issue, the mortgage bonds will be subject to partial redemption, i.e. their nominal unit value will be reduced by 2.75% on a quarterly basis. Final redemption has been set for September 10, 2025.
The Hogan Lovells team consisted of Partner Rafal Grochowski and Senior Associate Anna Kuczewska.