Over 5 billion PLN for Orlen's strategic investments

Orlen, as part of its first-ever bond issuance on the North American market, has secured $1.25 billion in financing for strategic investments.

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29 january 2025   |   11:55   |   Source: Orlen / Gazeta Morska   |   Prepared by: Kamil Kusier   |   Print

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The bond issuance with a 10-year repayment period enabled Orlen to secure funding on attractive terms, comparable to the interest rates of Polish government bonds. Investor demand for the bonds was more than three times higher than the planned issuance volume, confirming the international credibility of the company's new development strategy and investor confidence. At the same time, Orlen maintains a safe debt-to-EBITDA ratio, which is currently more stringent than the level set in the company’s previous strategy.

As part of the book-building process, 206 investors from various regions worldwide submitted bids totaling over $4 billion. The company allocated 6,250 bonds among 148 investors from 28 countries. The largest geographical share in the subscription came from investors in the U.S. (60%) and the U.K. and Ireland (22%). More than 60% of the subscriptions were acquired by investment funds.

- The best test of Orlen’s business strategy credibility is the trust of investors. The fact that demand for our bonds exceeded the issuance volume by more than three times proves that our operations and recently presented development plans create real value. Capital markets responded very positively to our offer, even though we proposed a long, 10-year bond repayment period, aligned with our strategic outlook. Investors appreciate not only the well-thought-out transformation plan but also our transparent and flexible approach to investment expenditures. In light of the massive energy projects ahead, securing stable financing on attractive terms is crucial. This will allow us to implement these projects more cost-effectively and efficiently, said Ireneusz Fąfara, President of Orlen's Management Board.

Orlen secured highly favorable financing conditions, with a fixed annual interest rate of 6%. The company will seek to have the bonds admitted to trading on the regulated market of Euronext Dublin.

The funds obtained from the issuance will enable the efficient allocation of capital to finance strategic projects, including the development of gas power plants, gas extraction, the construction of four offshore wind farms, large-scale energy storage facilities, and at least two small nuclear power plants.

Orlen Group has been present in the North American market for years. In Canada, it owns extraction assets, and in the U.S., it purchases liquefied natural gas (LNG) both on the spot market and under signed contracts. The volume of American gas will continue to increase in the coming years. The company also plans to enter the North American midstream market, developing infrastructure to facilitate LNG imports to Poland.

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