(Bloomberg) -- Poland launched its first foreign-currency bond sales of the year, seeking to cover record financing needs and joining a rush of emerging-market debt issuance before US President-elect Donald Trump takes office.
The Finance Ministry confirmed it was selling €1.5 billion ($1.5 billion) each in 5-year and 10-year notes at 110 basis-points above midswaps for the longer maturity and 60 basis points for the shorter security.
“Investors once again confirmed their great interest in Polish euro-denominated bonds by reporting total demand exceeding €9.3 billion,” the ministry said in a statement.
This week, regional peers Hungary and Slovenia came to international markets with €2.5 billion and €1 billion sales, respectively, while Saudi Arabia and Mexico were also among developing economies that kicked off foreign-currency borrowing in recent days.
The largest economy in the European Union’s east will see its net funding needs rise to 367 billion zloty ($88.4 billion) in 2025, from a revised 308.6 billion zloty last year, as it boosts defense spending amid the military conflict in neighboring Ukraine.
The Finance Ministry projected in the draft budget that it will raise the equivalent of 120.5 billion zloty abroad — almost twice as much as last year. The 2024 issuance took place in euros, yen and dollars.
Poland had relied more on domestic borrowing in recent years, benefiting from ample liquidity in its banking sector But the trend has changed with the need to diversify the investor base. The government had already covered about 30% of this year’s borrowing needs via pre-financing late last year.
On Thursday, the country sold 9.5 billion zloty of bonds at a regular auction, close to the upper end of the planned range. The Finance Ministry will also return next week to sales of short-term bills, offered last time during the Covid-19 pandemic.
The bookrunners for the eurobond sale are Citigroup Inc., JPMorgan Chase & Co. and Societe Generale SA.
--With assistance from Agnieszka Barteczko.
(Updates with Finance Ministry statement starting in second paragraph.)
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