The Polish Association of Financial Companies asked the country's government to intervene in the corporate bond market, warning that issuers may not be able to pay their financial obligations amid the COVID-19 crisis.
With the value of outstanding corporate bonds amounting to 110.5 billion zlotys, the Polish bond market constitutes an important source of financing for local companies and could collapse without a coordinated assistance for both investors and bond issuers, the association said.
The organization, which brings together more than 100 financial companies, suggested Polish authorities could support the bond market by allowing investment funds to participate directly in the central bank's open market operations and that the central bank and other government institutions could start purchasing corporate bonds on the secondary market.
It also proposed to open special credit lines for companies to help them repurchase bonds maturing in 2021 and introduce roll-overs and restructuring options for bonds purchased by government institutions.
As of March 31, US$1 was equivalent to 4.15 Polish zlotys.