Current report no.: 41/2015 

Date of report: 2015-11-19

Subject: Conclusion of security transactions concerning fixed-term credit

Text of the report:

The Management Board of CIECH S.A. (“the Company”, “the Issuer”) announces that the Company, with regard to liabilities connected with a fixed-term credit, made available to the Company under a credit facility agreement (the conclusion whereof was notified by the Company in current report no. 38/2015 of 30 October 2015 (“Credit Facility Agreement”)), for the purpose of limitation of a risk of unfavourable changes of variable interest rates (deriving from variability of the EURIBOR and WIBOR basic rates) and for the purpose of changing the currency of interest flow and principal amount flow in connection with the portion of the fixed-term credit denominated in PLN from PLN to EUR, concluded, on 13-19 November 2015, CIRS transactions (cross currency interest rate swap, “CIRS Transactions”) and IRS transactions (interest rate swap, “IRS Transactions”) (jointly “Transactions“). 

CIRS Transactions consist of a replacement of the variable element of interest payable on the fixed-term credit in PLN at the value of WIBOR 6M with a fixed interest rate in EUR and of a conversion of cash flows connected with disbursement and repayments of the fixed-term credit in PLN from PLN to EUR. The average interest rate in EUR, weighted by CIRS Transactions nominal values, amounts to 0.05% p.a.

IRS Transactions consist of a replacement of the variable element of interest payable on the fixed-term credit in EUR to the value of EURIBOR 6M with a fixed interest rate in EUR. The average interest rate in EUR, weighted by IRS Transactions nominal values, amounts to 0.20% p.a.

The Transactions were concluded with the following banks: Powszechna Kasa Oszczędności Bank Polski S.A., Bank Zachodni WBK S.A., Credit Agricole Bank Polska S.A., Bank Millennium S.A., Bank Handlowy w Warszawie S.A., HSBC Bank Polska S.A.

The Transactions were concluded for a period from 25 November 2015 (i.e. from the planned date for the first disbursement under the fixed-term credit, according to the Credit Facility Agreement) to 25 November 2020 (i.e. the date of final repayment of the credit), and they secure jointly the whole nominal amount of the fixed-term credit to the amount of PLN 1,045,031,446.54 (in the case of the CIRS Transactions) and EUR 69,673,222.19 (in the case of IRS Transactions).

Despite the lack of possibility of determining the maximum value of the Company’s liabilities in connection with the performed Transactions (due to the dependence of the value of such liabilities upon changes of interest rates and the exchange rate of EUR/PLN) and, therefore, a lack of possibility of qualifying the performance of the Transactions as significant agreements of the Issuer, the performance by the Company of the Transactions securing the whole nominal amount of the fixed-term credit is relevant from the point of view of evaluation of the currency structure and costs of service of liabilities of the Company under the Credit Facility Agreement.

Signatures of the Company's representatives:

Maciej Tybura – President of the Management Board

Artur Osuchowski – Member of the Management Board

Legal basis: Art. 56 section 1 point 1 of the Act on Offering - confidential information.