Bloomberg: Shale Gas to Pylons Spur Birth of Long-Dated Debt: Poland Credit

Poland’s plan to make a new state investment bank the springboard for funding everything from shale gas exploration to power grids is set to help build a market for longer-term corporate debt.

The Inwestycje Polskie program will leverage stakes in state-owned companies to pump as much as 40 billion zloty ($12.8 billion) into “strategic projects,” Treasury Minister Mikolaj Budzanowski said on Dec. 5. Bank Gospodarstwa Krajowego, which will oversee the initiative, sold six-year notes at 44 basis points above the six-month Warsaw interbank offered rate on Oct. 29. That compared with 150-point spread on 2019 bonds issued by state-owned Energa SA, Poland’s fourth-largest utility, according to data compiled by Bloomberg.

The lending through the program, which starts next year, will increase accessibility to longer-term financing and reduce loan costs, BGK Chief Executive Officer Dariusz Daniluk said in Warsaw on Dec 12. While CEZ AS (CEZ), the biggest Czech utility, has notes maturing in 25 years or more denominated in euros, dollars and yen, the longest bond by a Polish non-financial issuer is due in 2020, figures compiled by Bloomberg show.

“This will spur our long-term debt market, as banks and funds may feel more secure to co-finance government-backed, commercially-viable projects,” Boguslaw Grabowski, Warsaw-based chief executive officer at Skarbiec Holding Sp. z o.o., a mutual fund with $3.1 billion in assets, said by phone on Dec. 13.  MORE