2018 bond deals of the year: emerging markets
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2018 bond deals of the year: emerging markets

For CEEMEA and Latin American bond issuers, 2018 was not an easy year. To get a good deal done required impeccable timing — to the point of fortune telling; a nimbleness around political landmines in both regions, rising rates and falling currencies; and the courage to make difficult decisions on pricing. Often, the deals offered to issuers were not the ones they were used to. But in some cases, that did not mean they were wrong to print. Picking out the Deals of the Year for 2018 was not a straightforwardtask for GlobalCapital’s editorial team. But after much deliberation, the below were chosen, representing those market triumphs that stood out in a year of crises.

CEEMEA sovereign bond of the year

State of Qatar 

$3bn 3.875% 2023, $3bn 4.5% 2028 and $6bn 5.103% 2048

Al Khaliji, Barclays, Crédit Agricole, Credit Suisse, Deutsche Bank, Mizuho Securities, QNB Capital, Standard Chartered Bank

Qatar needed a showstopper for its return to market after the Gulf diplomatic crisis in the summer of 2017. The hostility of the other GCC states had called a halt to issuance and put in question the demand for its bonds without the usual strong support from its neighbours. But the $12bn multi-tranche bond it issued in April did not disappoint. It was not only the largest EM bond of the year, but drew a book of over $32.5bn.

It was all the more impressive that Qatar pulled off such a success just two days after its adversary Saudi Arabia had nipped into the market for its own $11bn deal. Some suggested Saudi had been trying to rock the Qatar bond by hoovering up liquidity ahead of the deal.

CEEMEA Financial Institution bond of the Year

Abu Dhabi Islamic Bank

$750m 7.125% perpetual contingent capital additional tier one sukuk

ADIB, Citigroup, Emirates NBD, First Abu Dhabi Bank, HSBC,

JP Morgan, Sharjah Islamic Bank, Standard Chartered Bank

After a storm-tossed summer for emerging market debt, Abu Dhabi Islamic Bank was the first issuer out of the gates in September. It brought the first public dollar sukuk since April and the first public issue from a Gulf bank since March. 

The deal was also innovative — ADIB was the first UAE issuer to raise additional tier one sukuk under the central bank’s new Basel III regulations. ADIB urgently needed the funding, given the October call date on its existing tier one deal. One banker called the deal “the epitome of level headed bravery”.

Though AT1 notes are substantially more difficult to sell, now that it is very expensive for Middle East banks as investors to put this risk on their balance sheets, the leads still managed to slam pricing 37.5bp tighter than initial guidance. 

CEE Corporate bond of the Year 


€1bn 2.949% January 2024

Gazprombank, JP Morgan, UniCredit

Gazprom, notorious for printing tight bonds, will not have liked the 25bp or so new issue premium investors demanded of it in November. But it took a view on the market outlook and paid up anyway — an astute decision, given the sell-off that gripped EM bonds shortly afterwards. 

The deal was the first Russian bond sold since the US imposed a particularly awkward set of sanctions on Russia in April. Gazprom’s importance to the West makes it an unlikely sanctions target, so the deal did not really re-open the market for other Russian borrowers. Investors fear that almost every other company, bank, or even the sovereign itself could be targeted in a further round of punishments. But other issuers in Russia did see it as an encouraging sign that certain names from the country, at least, could find demand in the international capital markets at a reasonable price. Towards the end of the year, confidence among those issuers was building as a result.

Latin America bond of the Year

Petróleos Mexicanos 

€600m 2.5% November 2022, €650m FRN August 2023, €650m 3.625% November 2025, €1.25bn 4.75% February 2029

BBVA, Deutsche Bank, Santander, Société Générale

Despite having issued in dollars in February and Swiss francs in May, Pemex still had a lot of funding to do as it watched Latin American peers struggle with tricky conditions. The success of its euro outing during a difficult May underlined its resourcefulness and deftness in clinching funding.

The unusual inclusion of a floating rate tranche brought in a different buyer base and allowed Pemex to achieve impressive size without compromising pricing on the other tranches.

Though pricing was wide to its dollar curve, the early funding certainty and genuine investor diversification were easily worth the price, in a year that raised questions as to how the next Mexican government would treat Pemex. 

Furthermore, while this year’s LatAm dollar deals broadly tanked in secondary, Pemex’s euro 2029s spent most of the year above par and only dipped into the mid-to-high 90s in late November.

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