Poland Raises 50 Billion Yen Selling 30-Year Bonds

Poland sold 50 billion yen ($443 million) of bonds maturing in 30 years, according to a faxed statement from Daiwa Securities SMBC Co., which handled the sale.

The eastern European nation priced the 2.81 percent bonds to yield 28 basis points more than the yen swap rate, the statement said. A basis point is 0.01 percentage point.

Mitsubishi UFJ Securities Co. also handled the sale.

Poland's fundraising follows Hungary, which last month sold 25 billion yen of samurai debt, or yen-denominated bonds issued in Japan by foreign entities. Hungary and Poland are the only governments that have been selling samurai bonds every year since 2004, Bloomberg data show.

``Poland is selling yen bonds to preserve the diversity of currencies for its funding. It likely is rolling over other yen debt,'' said Kerrin Howard, a London-based Asia market strategist at KBC Financial Products, a brokerage unit of KBC Groep NV.

``Raising funds in yen is absolutely cheap. It is similar to a carry trade; they raise funds in yen and use the money for other areas. Then they hope the yen will weaken as it comes time to repay.''

Poland pays a 4.5 percent coupon on 1.5 billion euros ($2.2 million) of bonds maturing in 2022, according to data compiled by Bloomberg.

Poland sold the yen bonds after the country posted a budget surplus for a third consecutive month in September as the nation's expanding economy and growing demand boosts tax revenue.

``After three quarters of lower than expected expenditures and higher revenue, spending is finally catching up with the initial budget plan,'' said Piotr Radzewicz, chief economist at Kredyt Bank SA, a Polish unit of Brussels-based KBC.

Poland, whose borrowing needs are on rise in the quarter ending December, will secure bulk of financing through the domestic market, he said.
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