State is going to support the development of corporate obligations

The first reading of the bill concerning obligations will be held today. It is supposed to encourage companies to gain capital in such way.

The bill simplifies the market of obligations, although it does not solve some problems related to investments, i.a. administrating of mortgages. There is a number of categories introduced by the obligation bill which certainly will be useful. They will simplify and introduce new categories to our financing market. However, it would be nice if there was a solution for current problems of investors on the obligation market like making more precise many regulations related to administrator of a mortgage where there are natural conflicts of interest – thinks Adam Zaremba, main economist in Saturn TFI.


The assumption of the authors of the bill is to support the development of obligations as they are an additional, next to loans, source of companies’ financing. Moreover, the bill introduces new categories of obligations. The example may be perpetual bonds which were useful 200 years ago to finance Napoleonic Wars in Great Britain. There was no such solution in Poland by now. Furthermore, there will be also subordinated obligations – enumerates Adam Zaremba. Perpetual bonds are never purchased. However, their owner receives interest for unlimited time. Subordinated obligations, in turn, are included by a partnership which is depended on issuer.


New law is supposed to enable emission of obligations by foreign entities and special-purpose partnerships.


The project of the bill was passed by the Cabinet in August of the current year. It came to the Parliament at the beginning of September. The bill will replace regulations from 1995, which – as we may read in the project – constitute a barrier in the development of corporate obligations. The amendment may come into force in January 2015.

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