After issuing the largest dollar deal ($1 billion) in December 1998, Telekomunikacja Polska (TPSA) delivered the largest euro-denominated corporate issue from the region in October 1999. It was another textbook deal.
Despite the generally weak demand of October 1999, and the particular lack of appeal of corporate issues from the region since the Russian crisis, the deal was a tightly priced blow-out. Lead arrangers Deutsche Bank and Salomon Smith Barney launched the Wve-year e400 million oVering at 150 basis points over the four-year Bund.
In fact, investors' craving prompted the leads to increase the issue from e300 million to e400 million, and to reopen it in December. The e100 million tap was launched inside the October spread at 145bp.
Investors across the spectrum found it hard to resist the high spread performance potential of the Baa3/BBB rated Polish telecom. TPSA not only beneWts from its dominant position in the largest telecom sector in the region, the outlook for Poland's convergence with the European single currency system and sovereign credit upgradings. TPSA also enjoys enormous scarcity value. The only other Polish investment-grade issuer is the Polish Republic, and it did not come to the market at all in 1999.