Current Report No. 19/2016: Resolution of the Management Board on issue of bonds under the Third Public Bond Issue Programme

Further to Current Report No. 94/2015 of December 30th 2015 on the Third Public Bond Issue Programme (the “Programme”), the Management Board of KRUK S.A. (the “Issuer” or “Company”) announces that on March 10th 2016 it passed a resolution on the issue of Series AB1 bonds (“Bonds”) and determination of their final terms and conditions, including the issue price and number of Bonds to be issued. The Bonds are covered by the base Prospectus approved by the Polish Financial Supervision Authority on February 4th 2016, available from the Company’s website: www.kruksa.pl. 
The issue will comprise up to 650,000 unsecured bearer Bonds in book-entry form, which will be offered in a public offering. The Issuer will seek to introduce the Bonds to trading on the regulated Catalyst market operated by the Warsaw Stock Exchange. 
In compliance with Art. 54.3 of the Public Offering Act, the Company announces that the Bonds will be offered at the issue price equal to their nominal value of PLN 100 per bond, and that their total nominal value will not exceed PLN 65m. 
Net proceeds from the issue will be used in accordance with the objectives of the Bond Issue Programme.
The Bonds will bear interest at a variable rate equal to 3M WIBOR (the rate charged for three-month borrowings denominated in PLN on the Polish interbank market) plus a fixed margin of 3.15 percentage points.
The maturity period of the Bonds is 60 months from the allotment date, with the proviso that the Issuer will have the right to early redeem all or a part of the Bonds at its own option, but no earlier than six months from the allotment date. The Issuer’s Management Board will decide at its own discretion whether to call any of the Bonds early. The Bondholders will have no right to call for early redemption, except in situations referred to in Art. 74.2, Art. 74.4 and Art. 74.5 of the Act on Bonds of January 15th 2015, i.e. in the event of the Issuer’s failure to timely fulfil, in whole or in part, its obligations under the Bonds, in the event of the Issuer’s merger with another entity, its division or transformation of its legal form, if the entity which has assumed the Issuer’s obligations under the Bonds is not authorised to issue bonds, or in the event of the Issuer’s liquidation. 
The Bonds will only confer the rights to cash payments. 
The Company Management Board states that, as at the last day of the quarter immediately preceding the offering of the Bonds, i.e. as at December 31st 2015, the Issuer’s liabilities totalled PLN 924m, including liabilities under borrowings and other debt instruments of PLN 890m, and none of the Issuer’s liabilities were past due.
The growth prospects of the debt collection market, and particularly the significant supply of cases expected to be outsourced for collection by the banking sector within the next several years, is an opportunity for the Issuer and its Group to purchase a large volume of debt portfolios. The Issuer expects the KRUK Group to make significant investments in debt portfolios over those years. As before, such investments will be financed with the KRUK Group’s internally generated funds from all segments of its business, including proceeds from debt portfolios purchased and from credit management services, as well as with borrowed funds, in particular bank loans and bonds issued by the Issuer.
Projects to be financed with proceeds from the issue of the unsecured Bonds will be comparable to similar projects undertaken by the Company to date.
The Company also reports that, pursuant to Art. 24.1 of the Public Offering Act, complete information on the detailed terms and conditions of the Bonds issued under the Programme (Final Terms and Conditions of the Bonds) will be published on the Issuer’s website www.kruksa.pl and additionally on the website of the Offeror, Dom Maklerski BDM S.A. www.bdm.pl
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