...Marginal Funding Instrument: Revenue bonds, introduced via the Polish Bond Act 14 years ago, continue to play a marginal role in financing public utilities' infrastructure and municipal services in Poland. At end-October 2014, revenue bonds constituted only 4% of outstanding bonds issued by Polish local and regional governments (LRGs) and public-sector entities (PSEs). We do not expect this to change in the medium term. Limited Scope of Issuers: In June 2000, the Bond Act was amended and the legal framework for revenue bonds was introduced in Poland. According to the Bond Act, revenue bonds can be issued only by LRGs and their associations, PSEs whose sole business is to meet the needs of local communities or to provide broad public utility services, Bank Gospodarstwa Krajowego (BGK, A-/Stable), the National Capital Fund (part of BGK Group) and toll-road operators. Subordination of Non-Revenue Bondholders: The basic concept behind revenue bonds is that these obligations are secured on all...
