(Updates with issue size, pricing)
By Marcin Goettig and Pawel Sobczak
WARSAW Oct 18 Poland surprised markets on
Tuesday by issuing its longest-dated marketable eurobond, part
of a dual-tranche 1.25-billion-euro ($1.4 billion) offering, as
it sought to take advantage of ultra-low yields while they last.
Three-fifths of the offer was made up of 12-year and the
rest of 30-year bonds.. It is the first time Poland
has brought a 30-year euro-denominated bond to market, although
it has made private placements with maturities of 30 and 50
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 750 million euros worth of
12-year debt at 50 basis points over mid-swaps, and at 120 basis
points over mid-swaps on the 500 million euros of 30-year debt,
according to a lead. The combined order books were over 1.75
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. "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. 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.
($1 = 0.9105 euros)
(Reporting by Marcin Goettig and Pawel Sobczak; Writing by
Marcin Goettig; Editing by Mark Trevelyan)