Poland is gearing up to launch a $1 billion bond issue in
the face the threat of further volatility on financial markets,
which has forced other central and eastern European sovereign
borrowers to hold fire in recent weeks.
In what would be its first venture in the US market this
year, Poland hopes to match the success of a $2 billion bond it
printed in July last year, after a four-year absence in the
Polands debt management office is now weighing
up the need to conduct another US roadshow, after an extensive
series of investor meetings there last year, Anna Suszynska,
deputy head of the public debt department at the Polish
ministry of finance, told Emerging Markets.
Poland has also met investors across Asia, leading to
expectations that the government is preparing a yen-denominated
bond, or Samurai. However Suszynska said that Asian investors
were also big buyers of dollar paper and could be drawn into
the US deal.
The country has already managed to navigate last
quarters heightened market turmoil, sparked by sovereign
debt concerns in the eurozone, to raise E4.13 billion through
two bonds priced in January and March.
Other issuers such as Albania (B1/B+), which embarked on a
roadshow for a debut eurobond in late April, have had to put
their deals on hold as concerns over a Greek bailout peaked
Altogether, A2/A-/A- rated Poland has secured more than 80%
of its E5.5 billion funding target for the year, added
Suszynska. She attributed the high demand for Polish paper to
investors recognition of the countrys positive
growth prospects this year.
GDP is expected to reach 2.7% this year, according to a
European Commission forecast last week, putting Poland on a par
with Slovakia as the fastest growing economy in the European
Union. Its budget deficit, however, will reach 7.3% of GDP in
2010, the Commission said, although this is expected to
decrease marginally by 2011.
But despite being in the final stages of preparing
documentation for its fresh bond issue, Poland may yet
hold off from issuing immediately. Suszynska said that along
with other sovereign debt borrowers in the region, the country
was waiting for a further tightening in spreads and more
I think it will be at least two weeks though until we
see others [sovereign] issuers coming out, and people will be
watching the market very carefully, she said.