Bank loans will likely remain the most popular source of external financing for Polish companies in the next few years, as interest rates are at record lows in central Europe’s biggest economy and competition is tough among cash-rich local lenders, the lawyers of the firm’s Banking and Finance team said.
“It’s a borrower’s market in Poland at the moment,” said Michał Kulig, senior associate at the Wolf Theiss Warsaw office. “There’s a lot of cash available, credit is cheap and competition is on the rise as banks fight for corporate clients, not only among themselves but also against investment funds and other financial investors.”
Total bank loans extended to non-financial companies in Poland climbed to a record high of PLN 352.8 billion (EUR 82.2 billion) in August, a 6.4% increase over the same period last year, according to data from the National Bank of Poland, the central bank. By comparison, corporate debt securities issued in the non-financial sector amounted to PLN 21.3 billion (EUR 5 billion), a 15% drop year-on-year.
“Banks will continue to be the dominant player on the financing market for Polish companies,” said Stefan Feliniak, attorney-at-law at Wolf Theiss Warsaw. “Borrowers with good financial standing are well aware that they can negotiate aggressively with lenders.”
During the LMA event, which provided training for lawyers and bankers on the syndicated loan market in Poland, Wolf Theiss experts ran a workshop on negotiating credit agreements.