Financing of investments with corporation bonds is becoming more and more popular among domestic companies. The value of this market amounted to about 64 billion zlotys in the previous year. We have experienced another record-breaking year which probably ended with the total amount of 63 – 64 billion, and maybe even 65 billion zlotys, which is another year of increase. We are glad that this source of financing is used more eagerly by Polish enterprises – says Regional Chairman of Fitch Ratings Mirosław Dudziński, responsible for companies and infrastructural projects in the countries of Central and Eastern Europe, during the talk with the news organization Newseria.
According to data from 11 months of the previous year, the value of bond issue of companies from a date of maturity was at the level of 63 billion zlotys, which is 20 per cent more in comparison to the same period in 2014. The total value of issued non-treasury debt amounted to almost 146 billion zlotys at the end of November 2015.
The domestic bond market has been experiencing a continuous increase since 2009. It results mainly from a growing awareness of financial directors and managers who benefit more eagerly from this source of capital. In comparison to a bank loan, the payoff of such debt burden is not amortized and credible issuers may gain profits without securities. An advantage of a corporation debt is also that it is possible to potentially gain financing for a longer period than in case of a credit – explains Mirosław Dudziński. This form of financing is used by enterprises from different sectors of economy, and recently by developer industry.
I think that the prospects for the market are really good. Except for increase in awareness of entrepreneurs, there will be two other important elements. The first one is increase in intensification of regulations for banks related to conditions of the Basel Committee. The second element is a bank levy – forecasts chairman Fitch Ratings.
The Basel conditions impose a duty on banks to create capital reserves which will help to reach a target level of the solvency rate. It is supposed to limit the risk of losing liquidity by banks. According to analysts, it may result in decrease in credit share. Financial institutions will become more careful with grating credits and their costs will increase. Many people believe that the bank levy will be passed on customers – at least partially, which should result in searching for capital in other sources. The first choice will be bonds. On the other hand, the increase in viability should attract even bigger group of investors, because yield will be more attractive form them – judges Mirosław Dudziński. I would even say that the market of corporation bonds will be developing faster than in 2015 – adds Dudziński.