PKO Bank Hipoteczny will next week print the first benchmark Polish covered bond since an update to the country’s law, after today (Friday) fixing the price for a PLN500m debut, and aims to sell a first euro benchmark in the second half of the year, according to an official at the issuer.

The new issue from PKO Bank Hipoteczny – the mortgage bank of PKO Bank Polski – will be the first benchmark covered bond from a Polish issuer since amendments to Poland’s covered bond legislation took effect on 1 January. The changes introduced maturity extensions with conditional pass-through techniques, among other revisions, and are expected to boost Polish covered bond issuance.

It will also be PKO’s first benchmark covered bond, following the launch of its programme in November and a PLN30m five year pilot issue in December.

PKO Bank Hipoteczny began taking orders for the PLN500m (Eu116m) five year issue on 4 April, and completed the bookbuilding process on Wednesday afternoon. The issuer then published the final terms of the deal this (Friday) morning, including the price, which has been set at 65bp over three month Wibor. Investors have now been asked to subscribe before the end of trading on Monday, with allocations to follow. The issue date is Wednesday (27 April).

PKO Bank Polski is acting as sole lead on the deal.

Rafał Kozłowski, CEO of PKO Bank Hipoteczny, said the bank plans to issue its inaugural euro benchmark covered bond in the second half of 2016. No Polish issuers have yet launched benchmark covered bonds in foreign currencies.

“The European covered bond market is much larger than the Polish domestic market, and the investor base is much wider,” Kozłowski added. “Having ambitious plans in terms of covered bond issues, we have to also look to the international investor society.

“We believe the interest of Polish investors in covered bonds will grow, and will eventually be much higher. But we can see that for the substantial growth of our covered bond issuance, international investors are also needed.”

Kozłowski said PKO intends to be a regular issuer, in both the Polish market and the international market.

“The frequency will depend very much firstly on the needs of the PKO group for long term financing and also on market conditions,” he said. “But we can say that we want to become a frequent issuer.”