High number of bonds of large Polish companies set to mature in 2017

An exceptionally high number of corporate bonds, including many listed on the Catalyst market of the WSE, are set to mature this year, and that could create opportunities for new investors, due to a high availability of bond repurchases, according to Michał Sadrak at Obligacje, a group of investment advisers. “[There will be] PLN 10.47 billion in corporate bonds expiring this year, with PLN 2.24 billion in Catalyst-listed securities by the Polish State Development Bank, the European Investment Bank and the bonds of mortgage banks […] and the maturing this year of bonds worth PLN 2.5 billion [belonging to energy company] PGNiG. This year will be different from previous ones,” said Sadrak. He added that PKN Orlen is set to issue PLN 700 million in a public offering. The large number of companies that will be refinancing expiring bonds could result in some interesting challenges, according to Sadrak. “[The large companies] will have to offer investors something more than just promises of improved financial condition,” he said. However, the experts also opined that the high level of refinancing won’t necessarily lead to investment instability, as they expect a lot of the debt to be transferred to institutional investors, such as commercial banks who hold the bonds in the mutual funds of their clients. “We estimate that the amount of outstanding debt will reach PLN 132-140 million, which will not be a value lower than in previous period,” Sadrak said.