There were $70.7bn of CEEMEA bonds with a maturity in 2014, according to Dealogic data. But the refinancing pressures on issuers will grow fast. There are $82bn of CEEMEA bonds with a maturity date in 2015. That number grows to as high as $101.7bn by 2020.
Much of the refinancing business is in Russian bonds because that country accounted for the lion’s share of deals in the last few years. Though there is volatility now around Russia and Ukraine, most bankers are not expecting sanctions so harsh that all of this business comes to a halt.
It's likely banks would have had to hire more staff to cover the volume of refinancing, and certainly for debt capital markets. Even if volumes are lower than projected, the headcount needed over the next few years may not be much lower than at present.
If there must be cuts, then most should be at senior level. The juniors on DCM desks typically have a focus on a country or region, but they are often jacks of all trades, masters of none. Though the Russian business took a hit this year, it has been partially compensated by an increase in volumes from other countries, meaning that total CEEMEA bond volumes for the year are only $25.4bn down on the $121.5bn done year-to-date last year.
It's worth bearing in mind that the second half of last year was much quieter than the first. DCM bankers covering Turkey and Africa for example are, somewhat smugly, saying that they are run off their feet. Juniors at most banks be moved from Russian coverage to other, busy areas.
The few senior DCM bankers that are paid more and have longstanding client relationships are a more tricky proposition. But with the juniors reallocated they will have more to do, and the Russian issuers that still have access to the international debt capital markets will need more innovative funding tools and advice to make the most of what market access remains for them.