Powszechna Kasa Oszczednosci Bk Plski : PKO BANK HIPOTECZNY WILL ISSUE FIRST EVER GREEN COVERED BONDS

2019.06.06

• PKO Bank Hipoteczny as the first mortgage bank in Poland joins the elite group of global issuers offering green covered bonds.
• The value of the issue will amount to PLN 250 million and the maturity date of green covered bonds is 30 September 2024.
• Spread over WIBOR 3M of 60 bps was set in the book building process which was conducted
  on 5 June 2019.

The issue of PKO Bank Hipoteczny's green covered bonds is a pioneering offer on the Polish market, addressed to demanding investors. These include mainly financial institutions that expect security, satisfactory rate of return and the certainty that their funds are used for financing sustainable investments

Green covered bonds are type of green bonds, where the proceeds will be exclusively applied for financing new or refinancing existing long-term residential mortgages with high energy efficiency. Green covered bonds are practically identical in terms of transaction structure and risk, like traditional mortgage covered bonds. The main difference is that the capital obtained from the issue of green mortgage covered bonds is intended only for financing of energy-efficient mortgages. Green covered bonds issued by PKO Bank Hipoteczny as the first in Poland received the Climate Bonds Initiative Certification, confirming the highest green standards set out in the Paris Agreement were met.

While preparing the issue of green covered bonds, PKO Bank Hipoteczny developed the Green Covered Bond Framework ('GCBF') https://www.pkobh.pl/en/investor-relations/green-covered-bonds/
- a document setting forth the standards for the issue of green bonds, which was established in accordance with the guidelines of Green Bond Principles 2018 ('GBP'). The rules are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the green bond market by clarifying the approach for issuance of a green bond.

It is recommended that in connection with the issuance of a green bond, issuers appoint an external review provider to confirm the alignment of their bond with the core components of the GBP. An institution with environmental expertise that is independent from the issuer may issue a Second Party Opinion. PKO Bank Hipoteczny has obtained second party opinion as a confirmation of compliance of the GCBF with GBP from Sustainalytics - the certified international provider https://www.sustainalytics.com/sustainable-finance/wp-content/uploads/2019/06/PKO-Bank-Hipoteczny-SA-Green-Covered-Bond-Framework-Second-Party-Opinion.pdf

Paulina Strugała, CEO of PKO Bank Hipoteczny, explains the reasons for the Bank's involvement in the growing market of green covered bonds:
PKO Bank Hipoteczny is the largest issuer of mortgage covered bonds in Poland and the obvious leader on the market. All of this encourages us to introduce innovative financial products and set new standards on the Polish market. The best example is our Green Covered Bond Framework and the criteria for green residential properties in Poland, developed on the base of the highest international standards. With the issue of green covered bonds, sustainable development becomes an integral part of our business.

According to the rules adopted in the GCBF, PKO Bank Hipoteczny, within one year from the date of issue of green covered bonds, will publish, on the Bank's website, a report on the allocation of funds raised under the issue.

Criteria for the assessment and selection of green assets, previously developed by PKO Bank Hipoteczny SA have been accepted by the international Climate Bonds Initiative under their Low Carbon Buildings Criteria and serve now as proxy for energy-efficient residential properties market in Poland.

EEM: a pan-European project with the participation of PKO Bank Polski and PKO Bank Hipoteczny

In April, PKO Bank Polski and PKO Bank Hipoteczny, as the first banks in Poland, joined the pilot project Energy Efficient Mortgages (EEM)

https://www.pkobh.pl/en/about-us/news/energy-efficient-mortgages-initiative-a-paneuropean-project-with-the-participation-of-pko-bank-polski-and-pko-bank-hipoteczny/

The project aims to create standardized, pan-European solutions for mortgage loans for housing and home financing, including energy-efficient solutions.

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PKO Bank Hipoteczny specializes in PLN- denominated residential mortgage loans. PKO Bank Hipoteczny's main goal is to provide long-term financing by issuing covered bonds.

PKO Bank Hipoteczny is 100% owned by PKO Bank Polski the largest Polish bank. In August 2014, PKO Bank Polski received approval from Poland's Financial Supervision Authority to set up a mortgage bank, which began its operations in April 2015.

Thanks to the dynamic development of PKO Bank Hipoteczny quickly gained the position of the leader of the mortgage market and is currently the largest mortgage bank and the most active issuer of covered bonds in Poland. As the only issuer from Poland, PKO Bank Hipoteczny since October 2016 has regularly performed benchmark issues of covered bonds denominated in euro, which are dedicated to institutional investors from the international market. PKO Bank Hipoteczny is also an active issuer of covered bonds denominated in domestic currency. The total value of outstanding covered bonds of PKO Bank Hipoteczny as of the end of April 2019 amounted to PLN 15.8 billion.

PKO Bank Hipoteczny is a member of The European Covered Bond Council (ECBC). In February 2018 PKO Bank Hipoteczny became the first Polish issuer to join the Covered Bond Label.. The Covered Bond Label is a quality label, the purpose of which is to highlight the security and quality of covered bonds to investors and to further enhance recognition of and trust in the covered bond asset class.

For further information please contact:

Bogumiła Laudowicz-Burda

Investor Relations Manager

PKO Bank Hipoteczny

02-515 Warszawa,

ul. Puławska 15

[phone]

[phone]

[e-mail]