In the third quarter of this year, issuers of corporate bonds conducted seven public issues for an amount of almost PLN 270 million. Thus, these were definitely the three weakest months of this year. For comparison, in the first quarter, issuers raised PLN 760 million, and in the second, PLN 349 million. Due to the comparatively small amount of issues, the average level of reduction was almost 50 percent, and investors have invested in total over PLN 678 million in bonds. This is more than in the entire second quarter.
268 million PLN worth of issues vs. 678 million PLN of subscriptions
The data speaks for itself – however, the potential problem is not demand but supply. Issuers are less likely to issue – in the first quarter, they carried out 17, and in the next, only 8. Some issuance prospects expire, and a large portion of issuers’ capital needs have been satisfied by the previous ones. There are no new issuers on the market of public corporate bond prospectuses yet – but the “old” ones are reappearing on the horizon.
October “almost” better than the whole 3rd quarter
In September, the Polish Financial Supervision Authority (KNF) accepted two public issuance prospectuses. One for the financial company PragmaGo (value up to PLN 500 million), and the second for Kruk, the largest debt collection company in Poland (value up to PLN 900 million). The latter issuer has already come to the market with an issue of PLN 75 million in October. The month of October itself is almost equal to the entire previous quarter in terms of issues. The public bond issue of the commercial developer Olivia Fin has already ended with a large reduction despite increasing the issue amount to PLN 60 million. Plus two more issues of the debt collectors Best and Kredyt Inkaso. Therefore, for the second half of October, we have a total of 4 issues for the amount of 225 million PLN – almost as much as in the entire third quarter.
The previous public issues of these issuers very often ended with significant reductions (last Best issue 65% reduction, Kruk’s 75% reduction, Kredyt Inkaso in PLN 71% reduction). If we add to this the Initial Public Offering (IPO) of Żabka, from which over 90% was returned to individual investors after a reduction of around PLN 3 billion, the picture becomes clear. The last quarter of this year in October alone approached the amount that issuers of corporate bonds came out for in the previous 3 months.
Author: Szymon Gil, Investment Advisor, Certified International Investment Analyst (CIIA), Michael / Ström Brokerage House
Source: https://ceo.com.pl/3-kwartal-2024-najgorszy-dla-emisji-obligacji-korporacyjnych-ale-pazdziernik-przynosi-odbicie-24033
