The Warsaw Hogan Lovells office advised Pekao Bank Hipoteczny on the issue of public mortgage bonds. This has been the first issuance of this type on the Polish market for five years. The total value of the issuance carried out by Pekao Bank Hipoteczny on August 30, 2018 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, consequently, they 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. The day of the final redemption has been set for September 10, 2025.
The transaction team of the Warsaw Hogan Lovells office included: legal advisor Rafał Grochowski (Partner, Head of the Banking Infrastructure Group) and advocate Anna Kuczewska (Senior Associate).