Investors have invested more than half of what they did in the entire year of 2023 in just the first three months of 2024. Issuers have already raised 760.5 million PLN from bonds. The amount is impressive, but the demand registered in these issues is even more so – amounting to 1.88 billion PLN.
The high interest from investors resulted in high reductions – the average level reached nearly 50%. Indicators of record market results are also visible in the number of issues. In the first quarter of 2024, there were 17 issues, compared to 37 throughout the previous year.
| Â | Issuer | Issue Value | Interest Rate | Tenor (years) | Date | Subscription Size (mln) | Reduction (%) | Number of Investors |
| 1 | GPM Vindexus | 21.8 | 6.00%+WIBOR3M | 3 | January | 74.22 | 70.70 | 1154 |
| 2 | PragmaGo | 25 | 5.15%+WIBOR3M | 3 | January | 53.77 | 53.50 | 815 |
| 3 | Ghelamco | 125 | 5.00%+WIBOR6M | 4 | January | 366.68 | 66.00 | 1604 |
| 4 | Kredyt Inkaso | 20 | 5.50%+WIBOR3M | 4 | January | 71.05 | 71.85 | 947 |
| 5 | Kruk (EUR) 10M EUR | 43.43 | 4.00%+EURIBOR3M | 5 | January | 99.12 | 56.19 | 457 |
| 6 | Kruk | 60.47 | 4.00%+EURIBOR3M | 5 | February | 86.03 | 29.70 | 449 |
| 7 | Olivia Fin | 30.23 | 5.30%+EURIBOR3M | 3.5 | February | 36.63 | 17.45 | 106 |
| 8 | Ronson | 60 | 3.85%+WIBOR6M | 3.5 | February | 155.00 | 61.26 | 1074 |
| 9 | Echo Investment | 70 | 4.00%+WIBOR6M | 4 | February | 193.28 | 64.00 | 1074 |
| 10 | Kruk | 70 | 4.00%+WIBOR6M | 5 | February | 284.25 | 75.37 | 2244 |
| 11 | Echo Investment | 70 | 4.00%+WIBOR6M | 4 | February | 157.61 | 56.00 | 795 |
| 12 | PCC Rokita | 25 | 2.80%+WIBOR3M | 5.25 | March | 86.43 | 71.07 | 1042 |
| 13 | Cavatina Holding | 21.65 | 6.00%+WIBOR6M | 3.5 | March | 25.86 | 16.29 | 198 |
| 14 | Arche | 21.5 | 4.40%+WIBOR3M | 3 | March | 21.66 | 0.77 | 225 |
| 15 | Victoria Dom | 50 | 5.25%+WIBOR6M | 3 | March | 85.43 | 47.29 | 867 |
| 16 | Kredyt Inkaso | 21.50 | 5.20%+EUBIRBOR3M | 4 | March | 25.42 | 15.40 | 232 |
| 17 | PragmaGo | 25 | 5.00%+WIBOR3M | 3 | March | 59.30 | 57.83 | 1101 |
| Average | Â | Â | Â | Â | Â | 48.9 | 846 | |
| Total | 760.587 | Â | Â | Â | 1881.731 | Â | 14384 |
Source: Michael / Ström Dom Maklerski, own compilation (exchange rate on 29.03.2024: 4.301, 29.02.2024: 4.319, 31.01.2024: 4.343).
Investor Appetite Unmet
The past quarter saw both smaller issues, oscillating between 20-25 million PLN, and those reaching (or even exceeding) 100 million PLN. Financial company GPM Vindexus, with an issue of nearly 22 million PLN, gathered subscriptions of 74 million PLN. The reduction exceeded 70%. Similar interest was shown in issues from PragmaGo and Kredyt Inkaso.
However, investors also subscribed heavily in larger issues, which also ended with large reductions. A prime example is Ghelamco, the record holder for the first quarter – the company, with an issue of 125 million PLN, attracted demand from investors of over 365 million PLN. Following closely was Kruk, which, with an issue of 70 million PLN, tempted investors to subscribe for nearly 285 million PLN. Also worth mentioning are two issues from Echo Investment of 70 million PLN each – registered demand was respectively 193 million PLN and 157 million PLN. The list of subscriptions exceeding 100 million PLN concludes with developer Ronson, which, with an issue of 60 million PLN, recorded a 61% reduction in subscriptions totaling 155 million PLN.
Thousands Eager for Bonds
More than 14,000 individuals participated in the 17 public issues. This means that on average, each issue attracted 846 investors. The highest number – 2244 – subscribed for Kruk’s issue. Interest in the corporate bond market remains strong, and there is a kind of self-fulfilling prophecy. Investors, observing the market and assuming high demand for specific papers, may place higher subscriptions “accounting” for the reductions they anticipate. As a result, they influence even higher levels of those reductions.
The very high demand for corporate bonds reported in public issues also occurs among institutional investors. Since the beginning of this year, corporate bond funds have received net inflows of over 2 billion PLN, with over 10 billion PLN in total inflows to debt funds – a significant portion of investment fund assets is placed in public issues.
| Inflows to Corporate Bond Funds | Inflows to Debt Funds Overall | Monthly Performance of Corporate Bond Funds(%) | Assets in Corporate Bond Funds(billion PLN) | Change in Assets m/m(%) | Asset Growth (million) | |
| January | 690 | 4184 | 0.90 | 11.727 | 7.40 | 810 |
| February | 705 | 3751 | 0.50 | 12.492 | 6.50 | 765 |
| March | 684 | 2821 | 0.60 | 13.276 | 6.30 | 784 |
Source: Michael / Ström Dom Maklerski, own compilation based on analizy.pl
Anticipating a Record
Considering the still active prospectuses (Victoria Dom, Dekpol, Ronson, Kruk), and the next ones approved by KNF (such as Marvipol, which already started its public issue of 150 million PLN in April) – it seems we can look at the upcoming three quarters with a great deal of optimism. Especially since issuers continue to file new prospectuses (such as Kredyt Inkaso or Cavatina). The result for the entire year 2023 was achieved 56% in the first three months of the current year. Thus, the question is not whether we will beat that result, but by how much.
Author: Szymon Gil, Securities Broker, Certified International Investment Analyst (CIIA), Michael / Ström Dom Maklerski
