Citigroup issued a rare Polish exchangeable bond in November, a $437 million three-year security that is convertible into shares in Bank Handlowy, Citi’s Polish subsidiary.
The bond was the clever solution to a thorny regulatory problem. According to the public securities law in Poland, if an investor has a stake of 50% or more in a company, it has to offer to buy the remaining shares. In line with this law, Citigroup bid for the remaining shares in Handlowy about three years ago, ending up with about 89% of the shares in the bank.
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