Hogan Lovells advised mBank Hipoteczny S.A. on establishing a mortgage covered bonds programme up to the maximum total nominal value of EUR 3 billion (or the equivalent in another currency). Commerzbank AG holds the position of the programmes arranger, and the dealers include Commerzbank AG, Erste Group Bank AG, J.P. Morgan Landesbank Baden-Württemberg, and Société Générale Corporate & Investment Banking. The programme instituted by mBank Hipoteczny S.A. is the second international programme for the issuance of covered bonds established by a Polish mortgage bank.

On the 6th of July 2017, Luxembourg Supervision Authority (Commission de Surveillance du Secteur Financier) approved the base prospectus prepared in connection with the admission of the covered bonds issued under the EUR 3 billion programme to the regulated market of the Luxemburg Stock Exchange (Bourse de Luxembourg). The minimal nominal value of each covered bond is EUR 100,000. Fitch Ratings gave the programme an A rating (with a positive outlook).

According to Piotr Zawiślak, the partner leading the Hogan Lovells Warsaw capital markets
and structured finance practice,
through the establishment of the EUR 3,000,000,000 international covered bonds programme, mBank Hipoteczny S.A. has proved its position as the leader in the Polish mortgage bank sector, and has secured international sources of financing for its lending activities. According to the issuer, the covered bonds issued under the programme are intended to be listed on the Luxembourg Stock Exchange and thus meet the European Central Banks eligibility criteria for these debt instruments."

mBank Hipoteczny S.A., which has been present on the Polish market since 1999, is the largest
mortgage bank in Poland in terms of total assets and total loan volume, and has the longest history as a covered bonds issuer on the Polish capital market. It plays a leading role on the real estate financing market and issuing covered bonds. mBank Hipoteczny S.A. finances many commercial investments including office buildings, retail space and warehouses, logistic centres and services,
hotels, and other commercial properties
. In the retail section, mBank Hipoteczny S.A. (in collaboration with its parent company, mBank S.A.) grants mortgage loans to natural persons. The bank's loan offers are complemented by its market analyses and consultancy services addressed to investors and commercial real estate entities.

The covered bonds issued by mBank Hipoteczny S.A. constitute the primary source for refinancing its activity. According to bank sources, the total nominal value of the outstanding covered bonds issued by mBank Hipoteczny S.A. amounts to approximately PLN 5.2 billion (as of 30 June 2017).

Covered bonds are debt securities which are issued exclusively by specialist mortgage banks in accordance with the Polish Covered Bonds Act of the 29th August 1997, and are backed by loan receivables secured by mortgages entered in the land and mortgage register with the highest priority. They are therefore, considered one of the safest financial instruments on the capital market.

Hogan Lovells has advised mBank Hipoteczny S.A., who acts as an issuer under the programme. The transaction, in the area of Polish law, was led by Piotr Zawiślak (partner), and supported by Artur Bilski (lawyer), both from the Hogan Lovells office in Warsaw. In addition, Andrzej Dębiec (partner), and Zbigniew Marczyk (counsel) from the Hogan Lovells tax practice were involved. Julian Craughan (partner), Marc Mouton (counsel), and Victoria Hewitson (associate), all from the Hogan Lovells office in London, were responsible for the English law issues.