Report No. 14/2017

Legal basis:

Article 17.1 of MAR – confidential information

Content of the report:

The Management Board of Powszechna Kasa Oszczędności Banka Polski Spółka Akcyjna (the “Bank”) announces that on 16 May 2017 it adopted a resolution on an intended premature redemption of all subordinated bonds (the “call option”) for the total nominal value of PLN 1,600,700,000 issued by the Bank on 14 September 2012; this issue having been reported in current report no. 69/2012 (the “OP0922 Issue” and “OP0922 Issue call option”, respectively). Exercising the call option with respect to the OP0922 Issue is dependent upon the Bank’s receipt of the required permission from the Polish Financial Supervision Authority (the “KNF”). The Bank will promptly announce receipt of the permission from the KNF in a separate current report.

At the same time, the Bank’s Management Board announces that on 16 May 2017 it adopted a resolution approving an issue of subordinated bonds (the “New Issue”) in 10NC5 format, i.e., with a maturity of 10 years, whereby the Bank has the right to redeem prematurely all the shares in the New Issue (the “call option”) within five years from the issue date, pending approval from the KNF. The total nominal value of the shares issued under the New Issue shall not exceed PLN 1,700,000,000. The bonds shall be issued under the terms of the Bonds Act, whilst the proceeds from the New Issue shall, pending approval from the KNF, be used to augment the Bank’s supplementary funds under the terms of Article 127 par. 2 pt. 2 of the Banking Act of 29 August 1997, and Article 63 of the Regulation (EU) no 575/2013 of the European Parliament and of the Council of 26 June 2013. The nominal value of one bond shall be not less than PLN 1,000. The benefits under the bonds shall be pecuniary only. The bonds shall earn interest under market conditions at six-monthly intervals. The interest shall be paid on the nominal value.

The Bank wants the proceeds from the New Issue to replace the proceeds earned by the Bank from the OP0922 Issue in connection with the intended call option regarding the OP0922. Subject to prior approval from the KNF, the call option regarding the OP0922 shall be exercised after the New Issue. During the period between the New Issue and the call option regarding the OP0922 Issue Call Option, the Bank’s total liabilities under the OP0922 and New Issue shall amount to PLN 3,300,700,000.