WARSAW Oct 18 Poland surprised markets by
issuing a marketable Eurobond with the longest maturity ever on
Monday as it sought to take advantage of ultra-low yields while
Poland opened the books on Monday on a dual-tranche euro
offering comprising 12- and 30-year bonds. It is
Poland's first-ever 30-year euro-denominated bond brought to
market, although a 30-year and a 50-year were issued through a
The decision took markets by surprise, because Poland
usually issues Eurobonds at the start of the year. The deputy
finance minister for debt said in September that no more issues
were planned for this year unless there was a "perfect,
Poland set the final guidance on 12-year debt at 50 basis
points over mid-swaps and on the 30-year bond at 120 basis
points over mid-swaps, according to a lead. The combined order
books were over 1.75 billion euros.
The European Central Bank had driven yields in the bloc to
unprecedented lows with its programme of asset purchases, but
earlier in October yields jumped on concern the scale of
purchases might be reduced.
"I can definitely see the logic of trying to utilise the
current very conducive market conditions, the hunt for yield and
very low yields in the euro zone," said Jakob Christensen, head
of emerging market research at Copenhagen-based Danske Bank.
A tapering off of ECB asset purchases would probably lead to
higher euro zone yields, increasing the cost of financing for
countries like Poland.
"We want to take advantage of the good climate on the
market, pre-finance next year's borrowing needs," Deputy Finance
Minister Piotr Nowak said on Monday. "We want to avoid potential
uncertainty related to the development of the situation in the
United States," he said, without elaborating.
The United States holds a presidential election on Nov. 8,
and the Federal Reserve is expected to raise U.S. interest rates
by the end of the year, a decision that could translate into
higher yields on the U.S. market.
Poland's 30-year bond follows Italy's first 50-year bond,
issued in October. And earlier this year France,
Belgium and Spain all issued 50-year bonds. In March, Ireland
issued a 100-year bond that almost certainly none of the
investors who bought it will live to see redeemed.
The Polish bonds are expected to price today via Barclays,
BNP Paribas, Citi, Commerzbank and Santander.
(Reporting by Marcin Goettig and Pawel Sobczak; Writing by
Marcin Goettig; Editing by Larry King)