Report No. 7/2016

Legal basis:

Paragraph 5.1.3 of the Ordinance of the Minister of Finance of 19 February 2009 on current and periodic information published by issuers of securities and on conditions under which such information may be recognised as being equivalent to information required by the regulations of law of a state which is not a member state (the “Regulation”)

The report:

The Management Board of Powszechna Kasa Oszczędności Bank Polski Spółka Akcyjna („PKO Bank Polski” or the „Bank”) hereby informs that on January 29th 2016 the Bank concluded a guarantee agreement with a counterparty (the “Counterparty” or the “Guarantor”) providing for unfunded credit protection with respect of a portfolio of selected corporate exposures of the Bank, within the meaning of the CRR regulation (the “Guarantee” and the “Guarantee Agreement” respectively).
The value of the portfolio covered under the Guarantee (amount of the Guarantee) amounts (after rounding) to 5 034 581 272 PLN (in words: five billion thirty four million five hundred eighty one thousand two hundred seventy two PLN).

The maximum time of the coverage under the Guarantee is 36 months, however the Bank shall be entitled to unilaterally terminate the Guarantee prior to the expiry of this period.
The Guarantee Agreement provides for liquidated damages (contractual penalties) that may be due to the Guarantor from the Bank in case of a breach of certain obligations of PKO Bank Polski under the Guarantee Agreement. The total amount of these liquidated damages (contractual penalties) shall not exceed 24 000 000 PLN (in words: twenty four million PLN). The Guarantee Agreement does not preclude from seeking redress of further damages exceeding the sum of liquidated damages (contractual penalties).

The Guarantee Agreement constitutes a “material agreement” within the meaning of par. 2 section 1 item 44 of the Regulation due to the Guarantee amount exceeding 10% of the Bank’s own funds.
The Guarantee Agreement represents the highest value among the agreements concluded with the Counterparty and subsidiaries of the Counterparty within 12 months preceding the conclusion of the Agreement.