2018-04-20    Debut of mBank Hipoteczny covered bonds issue on the international market


As part of the first foreign issue of covered bonds, mBank Hipoteczny placed on the Euromarket securities with a total value of EUR 300m, with a fixed coupon of 1.073% and a maturity of 7 years. This is the most advantageous issue in the history of mBank Hipoteczny. Consequently, investors’ demand exceeded the planned issue level more than three times.


The final valuation of covered bonds issued by mBank Hipoteczny was 42 bps above the EUR midswap rate, which resulted in the coupon at 1.073%. Initially, the bank offered a margin of around 48 bps, however, during the book-building, with the incoming investors’ subscriptions, it was reduced to the level of 42 bps. As a result, the margin dropped to a historic low which is the benchmark for the valuation of future international issues by mBank Hipoteczny.


Investors’ demand was very high and exceeded the assumed issue level more than three times. mBank Hipoteczny Covered Bond Purchase Declaration Forms totalling more than EUR 800m were submitted by 60 investors.


Since 2000, mBank Hipoteczny has been a regular issuer of Polish covered bonds. The issues in EUR have been carried out in the form of private placements, and their volume have not exceeded EUR 100m. The establishment of an international bond issue programme in 2017, the adjustment of its format to European standards and the distribution to a broad investor base allowed to issue covered bonds denominated in EUR on very advantageous terms.


The issue of covered bonds in foreign markets creates an opportunity for the development of residential construction sector in Poland. Banks – raising financing through covered bonds – increase their ability to grant loans for real estate financing in Poland – says Krzysztof Dubejko, director of the Treasury Department at mBank Hipoteczny.