Powszechny Zaklad Ubezpieczen : Execution of Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time and Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time

Date of preparation:	2 November 2020
Issuer's abbreviated name:	PZU SA
Current Report No. 35/2020
Subject:	Execution of Annex no. 1 to the Mandate Agreement to Provide
	Unfunded Credit Protection from Time to Time and Annex no. 1 to
	the Master Agreement to Provide Counter Guarantees from Time
	to Time
Legal basis:	Article 17 section 1 of MAR - inside information

Body of the report:

In reference to current report no. 34/2020 of 2 November 2020 and pursuant to Article 17 section 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC ("Market Abuse Regulation"), the Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna ("PZU SA", "Company") reports that on 2 November 2020 Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time was executed with Alior Bank Spółka Akcyjna and Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time was executed with the Counterparty.

1. Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time

Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time defines the rules for PZU SA to issue insurance guarantees for unfunded credit protection within an exposure limit under instructions from, and in favor of, Alior Bank SA.

The maximum exposure limit for the guarantees issued pursuant to Annex no. 1 to the Mandate Agreement to Provide Guarantees from Time to Time is PLN 4 billion (say: four billion zloty). The limit is in force for a period of 3 years and is a revolving limit, meaning that the expiry of a guarantee makes the "freed up" amount available within the limit minus any possible disbursements under a guarantee.

The fee for extending the guarantee will depend, among other things, on portfolio amortization. In addition, the fee may include a premium for a counter guarantee whose issuance PZU SA may commission the Counterparty.

At present, it is not possible to state the amount of the fee for a guarantee since it will depend on the amount of the guaranteed sum and the quality of the portfolio collateralizing the guarantee. The issuance of every guarantee will be preceded by an application from Alior Bank SA and an evaluation and valuation of the portfolio presented for that guarantee.

Detailed information concerning the individual guarantees issued by PZU SA under Annex no. 1 to the Mandate Agreement to Provide Guarantees from Time to Time will be published by PZU SA in separate current reports.

Alior Bank SA will present a declaration of voluntary submission to enforcement in the form of a

notary deed to collateralize the payment of the fee for a guarantee under the executed Annex no. 1 to the Mandate Agreement to Provide Guarantees from Time to Time.

The maximum term of the guarantees issued under Annex no. 1 to the Mandate Agreement to Provide Guarantees from Time to Time is 5 years. Alior Bank's share of the due and payable receivables by virtue of the accounts receivable is 10%.

Annex no. 1 to the Mandate Agreement to Provide Unfunded Credit Protection from Time to Time contemplates contractual penalties that may be due to PZU SA from Alior Bank SA if Alior Bank SA breaches certain obligations stemming from Annex no. 1 to the Agreement. The total maximum amount of contractual penalties cannot exceed PLN 3,000,000 (say: three million zloty). Annex no. 1 to the Agreement does not rule out the possibility of pursuing damages exceeding the sum total of the contractual penalties.

2. Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time.

Annex no. 1 to the Master Agreement to Provide Counter Guarantees from Time to Time defines the rules for the Counterparty to provide counter guarantees under instructions from PZU SA issued in favor of Alior Bank SA.

The available limit of counter guarantees is PLN 2.6 billion (say: two billion six hundred million zloty). The available limit will be reduced whenever a subsequent Counter Guarantee is extended by the guaranteed amount specified in that Counter Guarantee; the available counter guarantee limit is a revolving limit, meaning that the expiry of a Counter Guarantee will make that amount available under the limit.

Legal basis: Article 17 section 1 of MAR - inside information.