Significant price drop in the (model portfolio constituent) 2020 bond today, following an RNS announcement on potential Polish legislation affecting permitted cost of credit.
"Dependent on legal interpretation of the final version, however, there can be no assurance that the legislation, if introduced in its present form, would not have some adverse financial impact on IPF".
The equity is off by nearly a quarter today alone, so there is fear out there that this could be serious. Poland seems to have accounted for over half of IPF's profits last year, so one can understand concern.
The chief exec on a conference call this morning (available at http://www.ipfin.co.uk/investors.aspx)
opined that the proposed change to previously agreed arrangements is politically inspired in an election year, a surprise to company, industry and regulator. It is the company's view that whilst unable to go into detail, there will be means of mitigating any financial impact and Poland will continue to be the most profitable by geography. Others in the industry, particularly payday lenders (not IPF) stand to lose more, should the changes go through as currently framed.
So, is a threat or an opportunity?