The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Market Monitor: EMERGING CURRENCY EUROBONDS - What a lot of zloties

The opening of zloty-linked and zloty-denominated international bond markets suggests that Poland might replace the Czech Republic as the standard-bearer for eastern and central Europe in the capital markets.

Until recently, fixed-income investors looking to gain exposure to the appreciating zloty have been largely limited to Polish government bond markets. Polish T-bill yields have been as high as 24% in recent months, but convertibility, settlement and credit risk have deterred many international investors.

In late January the EBRD offered $30 million of dollar-denominated one-year bonds carrying a 20.5% coupon payable in dollars but with the overall return linked to the performance of the zloty. The proceeds of the deal were swapped into floating-rate dollars.

According to syndicate officials at the deal's lead manager, Chemical Investment Bank, assuming a stable zloty/dollar exchange rate performance from the launch date, the deal offered an effective yield of some 20.62% over its one-year tenor. Although the transaction offered no protection on the principal should the zloty fall in value, the high interest rate carried by the deal would nevertheless still guarantee investors a healthy return.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree