On 29 March 2019, the Company issued subordinated (hybrid) bonds with the nominal value of PLN 400,000 thousand as part of the subordinated bond issue program concluded with Bank Gospodarstwa Krajowego (BGK) on 6 September 2017.

The financing period is 12 years from the issue date, however in accordance with the nature of hybrid financing the first financing period has been defined as 7 years (the so-called non-call period), during which TAURON will not be able to redeem the hybrid bonds early and BGK will not be able to sell the bonds to third parties early (in both cases subject to the exceptions defined in the documentation). The Agreement also provides for an option to defer the hybrid bonds’ interest payment dates until, at the latest, the hybrid bonds’ maturity date. The subordinated nature of the bonds means that in case of a bankruptcy or winding up of TAURON the obligations related to the bonds will be repaid only ahead of the liabilities of TAURON’s shareholders. The hybrid bond issue has a positive impact on the TAURON Group’s financial stability as the bonds are excluded from the calculation of the leverage ratio, which is a covenant in some of TAURON’s financing programs. Furthermore, 50 percent of the hybrid bonds amount will be classified by the Fitch rating agency as equity in the rating model, which will have a favorable impact on TAURON’s rating. The hybrid bonds were granted a BB+ rating by the Fitch rating agency.

The proceeds from the issue were used to fund the TAURON Group’s operating expenses and capital expenditures.

The table below presents the summary of the TAURON Group’s issued and non-redeemed bonds in 2019 underwritten by entities other than the TAURON Group’s subsidiaries, listed according to their maturity.

Table Summary of the TAURON Group’s issued and non-redeemed bonds in 2019 underwritten by entities other than Group’s subsidiaries
Issuer Investor Type and level
of interest rate
Issue date Maturity date Nominal (par) value (‘000)
1. TAURON BNP Paribas WIBOR 6M+fixed margin 25.03.2019 25.03.2020 PLN 3,100
09.11.2018 09.11.2020 PLN 6,300
29.02.2016 29.12.2020 PLN 51,000
2. TAURON Eurobonds Fixed interest rate 05.07.2017 05.07.2027 EUR 500,000
3. Finanse Grupa TAURON (formerly: TAURON Sweden Energy) German market investors Fixed interest rate 03.12.2014 03.12.2029 EUR 168,000
4. TAURON BGK WIBOR 6M+fixed margin 2014-2016 2019-2029 PLN 1,430,000
5. TAURON EBI Fixed interest rate 17.12.2018 17.12.2030 PLN 400,000
6. TAURON EBI Fixed interest rate 19.12.2018 19.12.2030 PLN 350,000
7. TAURON BGK WIBOR 6M+fixed margin 29.03.2019 29.03.2031 PLN 400,000
8. TAURON EBI Fixed interest rate 16.12.2016 16.12.2034 EUR 190,000

On 4 November 2019, the Company made the timely redemption of the market listed TPEA1119 series bonds.

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