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Capital Markets

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 April 1st 2020, the Capital Markets participated in 228 domestic debt financial instrument issues (mostly commercial papers and bonds) totalling EUR 26.3 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, after having arranged 8 successful public offerings which amounted to EUR 315.8 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 covered by the mentioned services:

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

Commercial Papers

Commercial papers (CPs) are transferable, registered short-term financial instruments (with maturities up to 364 days) issued by companies (issuers), in dematerialised book-entry form. They enable issuers to meet  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 to the issuer’s needs   
  • Matching the supply and demand by matching the investment community's expectations with those of  issuer
  • 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
  • Freeing of credit lines/bank limits for approval of other facilities  
  • broadening of the investor base, by attracting important institutional investors (mutual/investment funds, pension funds, insurance companies, brokerage firms, companies) as well as retail investors
  • No collateral required - in general, commercial papers are unsecured instruments 
  • Flexibility and speed in financing short-term financial needs without extensive documentation required

Risks of Financing via Issuing Commercial Papers:

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

Significant risks include:

  • Exchange Rate Risk – The risk of a rise or fall in the value of obligations under an issued financial instrument denominated in a foreign currency, expressed 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 of 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 disclosing information 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 unit within the Corporate Banking Products Department of PBZ is the market leader in structuring and issuing commercial papers for clients, holding a 59.7% market share in the total nominal amount of CPs issued on the Croatian market.

PBZs Credentials (selected projects/issues)

Commercial Papers

Bonds

Bonds

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.) according to the issuer’s needs and requirements
  • Matching the supply and demand by matching the investment community’s expectations with those of the issuer
  • Competitive and comparative financing costs in comparison to the costs associated with  traditional credit lines/loans
  • Possibility to fix the interest rate for a longer period (financing cost) in favourable market conditions
  • A decrease in the exposure of a particular bank to the issuer (thus freeing the bank limits for approval of other facilities)
  • Financing source diversification and investor/creditor base broadening (by attracting different institutional investors, such as investment funds, pension funds, insurance companies, brokerage firms, commercial banks other than the "house bank(s)" of the issuer, and retail investors as well)

Advantages in terms of marketing

  • By entering the capital market i.e. launching a bond issue, the issuer demonstrates its financial strength, stability and transparency 
  • A bond issue, compared to traditional financing via direct credit lines, draws attention of media, as has been shown by excellent media coverage of previously arranged issues of government, municipal and corporate bonds
     

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 issues.

Significant risks include:

  • Exchange Rate Risk – The risk of a rise or fall in the value of obligations under an issued financial instrument denominated in a foreign currency, expressed in the 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, of 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 disclosing information 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 of Corporate Bonds, Municipal bonds, Sovereign Bonds and  Eurobonds):

Bonds

Documents (links):

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.

Shares (Equities)

Shares (Equities)

PBZ offers the services of structuring and implementing both initial and secondary public offerings of shares (IPO & SPO) and provides share listing services on the Zagreb Stock Exchange.

PBZ has provided such services to leading Croatian companies, which included Agrokor, Belišće, Croatia osiguranje, Meritus ulaganja, 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, raising  equity capital necessary for its 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 state-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, usually resulting in a reduction of financing costs
  • Access to new sources of financing, broader investor base and reduced dependence on banks 
  • Possibility to monitor on a daily basis the share price, effects of business decisions and business results on the enterprise value
  • Establishes a positive reputation and perception of the company in the eyes of the public
  • Positive effects on the domestic capital market (such as increased market capitalization of the local stock exchange, increased liquidity and market depth)

Secondary Public Offering (SPO)

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

  • Issuance of new shares – the company increases its equity capital in order to raise additional funds for business development, or refinance existing liabilities 
  • 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): 

Shares

Contact

Contact

Capital Markets
Address: Radnička cesta 50, Zagreb
Tel: +385 1 63 60761; 60765; 60702; 64476; 64477
Fax: 01 / 63 60 743

E-mail: capital.markets@pbz.hr

Contacts

Information on Servces

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