Capital Markets

PBZ is one of the leading issue agents and underwriters of sovereign, municipal and corporate financial instruments on the domestic capital market. From early 2000 to March 1st 2018, the Capital Markets participated in 218 domestic debt financial instrument issues (mostly commercial papers and bonds) totalling EUR 18,7 billion and covering 87% of the total nominal amount issued. In the last 5 years, PBZ has become the lead issue agent in IPOs and SPOs on the regional equity market. This period PBZ marked with 8 successful public offerings, amounting to EUR 213,4 million.

Services offered include:

  • Financial instruments underwriting and/or offering on a firm commitment basis 
  • Financial instruments offering without a firm commitment basis

Financial instruments corresponding to offered services:

  • Debt financial instruments
    - Short-term (commercial paper) and/or
    - Medium- and long-term (bonds
  • Equity financial instruments
    - Shares (equities)

Commercial papers (CPs) are transferable, registered short-term financial instruments (maturing up to 364 days) issued by companies (issuers), in dematerialised book-entry form. They enable issuers cover their short-term financing requirements by issuing tranches within the limit established by the CP Issuance Program, depending on their needs and market conditions. A commercial paper is usually an unsecured financial instrument.

The Commercial Paper Issuance Program is a framework for financing the short-term financial requirements of a company under which the issuer can issue customized CP tranches of different maturities, denominations and currencies, provided that the total amount of outstanding CPs does not exceed the Program limit at any time.

Advantages of Financing via Issuing Commercial Papers for the Issuer:

  • Financing at competitive market rates (yields) and financing cost optimization
  • Customization of CP tranches (issue amount, maturity, denomination, currency, issue timing), according issuer needs
  • Matching supply and demand by matching the investment community's expectations with the issuer's
  • Establishing a reputation based on the issuer's capital markets track record and facilitation of future long-term debt or equity instrument issues
  • Optimization of working capital management
  • Impartiality from credit line obligations imposed by banks
  • Investor base broadening, including institutional investors (i.e. mutual/investment funds, pension funds, insurance companies, brokerage firms, companies) and retail investors
  • Impartiality from collaterals because in general, commercial papers are unsecured instruments 
  • Flexibility and speed in financing short-term financial needs without extensive documentation

Risks of Financing via Issuing Commercial Papers:

Risks for issuers are the most important factors to consider when making a decision on financing via commercial paper issuance.

Significant risks include:

  • Exchange Rate Risk – The risk of a rise or fall in the value of obligations under an issued financial instrument of a foreign currency, denominated in local currency
  • Interest Rate Risk – The risk of a fall or rise in market yields/interest rates with respect to the yield/interest rate paid by the issuer on issued financial instruments (the so-called financing cost)
  • Reputation Risk – The risk of an adverse impact, resulting from an event or company activity on a company's reputation (e.g.: a failed new issue of financial instruments, inability to pay the interest and/or principal of a financial instrument, disregard for regulatory obligations connected with reporting to shareholders and the public)

Please note that this list does not include all risks an issuer is exposed to, only the most relevant ones.

The Capital Markets Department within the Investment Banking Division of PBZ is the market leader in structuring and issuing commercial papers for clients, having a 58.7% market share in the total nominal amount of CPs issued on the Croatian market.

PBZs Credentials (selected projects/issues)

Commercial papers

 

Privredna banka Zagreb is the leading institution on the primary capital market in Croatia. As Issue Agent and/or Underwriter and/or Listing Agent, PBZ structured and realized the majority of past sovereign, municipal and corporate bond issues on the Croatian market.

Advantages of financing via Bond Issuance for the issuer:

  • Instrument customization (issue amount, maturity, interest rate, currency, redemption method and dynamics etc.) to the issuer’s needs and requirements
  • Matching the supply and demand of the investment community’s expectations with the issuer’s
  • Competitive and comparative financing costs in comparison to traditional credit facilities/loans
  • Possibility to fix the interest rate for a longer period (financing cost) in favourable market conditions
  • A decrease in exposure to a particular bank and impartiality from credit line obligations usually imposed
  • Financing source diversification and investor/creditor base broadening (institutional and retail investors other than the "house banks" of the issuer)

Risks of Financing via Bond Issuance for the issuer
Risks for issuers are the most important factors to consider when making a decision on financing via bond issuance.

Significant risks include:

  • Exchange Rate Risk – The risk of a rise or fall in the value of obligations under an issued financial instrument of a foreign currency, denominated in local currency
  • Interest Rate Risk – The risk of a fall or rise in market yields/interest rates with respect to the yield/interest rate paid by the issuer on issued financial instruments (the so-called financing cost)
  • Reputation Risk – The risk of an adverse impact, resulting from an event or company activity on the company's reputation (e.g.: a failed new issue of financial instruments, inability to pay the interest and/or principal of a debt instrument, disregard for regulatory obligations connected with reporting to shareholders and the public etc.)

Please note that this list does not include all risks an issuer is exposed to, only the most relevant ones.

PBZ Credentials (selected projects /issues)

Corporate Bonds

Municipal bonds

Sovereign Bonds

 

Eurobonds

 

Documents:

Prospekt uvrštenja obveznica JGL 2020.
Prospekt uvrštenja obveznica Plodina 2015.
Prospekt uvrštenja obveznica JGL 2016.
Prospekt Rijeka Bonds - III transa
Prospekt izdanja obveznica Plodina
Prospekt izdanja Obveznica Rijeka prometa
Prospekt izdanja obveznica HEP 2017.
Prospekt izdanja obveznica odasiljaća i veza
Prospekt izdanja obveznica Grada Osijeka
Prospekt obveznica Grada Vinkovaca
Prospekt izdanja obveznica JADRANKE
Prospekt izdanja obveznica JGL
Prospekt RH 2017 - II tranša
Prospekt izdanja obveznica HEP 2013
Prospekt RH 2013 - II tranša
Prospekt izdanja obveznica Nexe Grupe
Podravka Prospekt 2006.
Prospekt RH 2015.
Prospekt RH 2010.
Belišće Prospekt 2009.

PBZ offers structuring and implementation services for both initial and secondary public offering of shares (IPO & SPO) via public and/or private offerings and provides share listing services on the Zagreb Stock Exchange.

PBZ has provided such services to leading Croatian companies, which include: Agrokor, Belišće, Croatia osiguranje, Jadranka, Jamnica, Konzum, Našicecement, Pliva, Petrokemija, Uljanik, Luka Rijeka, HPB, Stanovi Jadran and others.

Initial Public Offering (IPO)

IPO (Initial Public Offering) is a process in which a company offers its shares to the public for the first time, through which it raises equity capital necessary for business development. The shares offered are listed on a regulated market for the first time and after the process is completed, the company becomes publicly listed. Typical clients for an IPO are big government owned companies preparing for/or undergoing privatization and private companies eager to raise capital for further expansion and business activity development.

Advantages of an Initial Public Offering:

  • Strengthens the financial position of the company
  • Increases transparency of business activities towards the public, usually resulting in a reduction of financing costs
  • Access to new sources of financing, broader investor base and reduced bank dependence 
  • Possibility to monitor the daily share price, effects of business decisions and business results on enterprise value
  • Establishes a positive reputation and perception of the company in the eyes of the public
  • Positive effects for the domestic capital market (i.e. increase in market capitalization of the local stock exchange, liquidity and market depth)

Secondary Public Offering (SPO)
In contrast to an IPO, in a Secondary Public Offering (SPO), the company issues shares already listed on a regulated market. In general, there are two types of SPOs:

  • Issuance of new shares – the company increases its equity capital with goals of raising additional funds for business development, refinancing existing liabilities or compensating realized losses
  • Sale of existing shares by one or more shareholders – the amount of equity capital remains unchanged. Existing shareholders with a significant stake in a company use this way of sale in order not to distress the market share price by a direct sale on the regulated market

PBZ Credentials (selected projects/issues)

 

Capital Markets Department
Address: Radnička cesta 50, Zagreb
Tel: +385 1 63 60762; 60761; 60765; 60702
Fax: 01 / 63 60 743
E-mail: capital.markets@pbz.hr