The primary bond market for CEEMEA issuers may have made a steady start this September but it is no longer one where big order books and slim new issue concessions are markers of success. Just getting the deal done is a good outcome.
EM bond investors are still enjoying inflows, giving them the cash to buy new bonds, and issuers still pay historically tight spreads.
But there is a lot making issuance more difficult than before August and far harder than before the US-Iran war began at the end of February.
The war has no end in sight and US Treasuries have been very volatile since the end of August. On Thursday yields rose again, with the 10 year passing the 4.9% mark for the first time in several years.
It is not a market where CEEMEA new issues will achieve s cover ratio of four or five times.
Nor is it a market where there will be an endless stream of trades priced without a new issue concession, or even a negative one. Some borrowers may achieve that but it will not be the norm.
A book twice the deal size is now the marker of success as is a new issue concession of 5bp-10bp.
There is no reason to panic. Emerging market borrowers still have a receptive primary market in which to dip and it is open to the vast majority of them. Only last week, Pakistan printed a public dollar bond, a sovereign that just a few years ago had bonds trading at distressed levels.
But the definition of success has changed and not just compared to the pre-war primary market but also what went before August.
Printing will require a new issue premium for most, even issuers as strong as First Abu Dhabi Bank. Big oversubscriptions will be rare.
This autumn is a different primary market to the one before summer and a very different one to that at the start of the year. It is not tiny concessions or big books that represent success but pricing a deal at all.