As Citi goes, so goes central and eastern Europe. Perhaps the mantra should be reversed. Or maybe it doesn’t matter, so intertwined are the two, one an abstract mix of emerging states, the other still a powerhouse bulge bracket adviser-lender.
Citi rarely fails to top the league tables when it comes to emerging market sovereign bonds. In the first quarter of 2016, according to data provider Dealogic, it underwrote seven bonds for governments across central and eastern Europe (including Russia and Turkey), worth $2.21bn, for a near-20% share of the market, outpacing its closest rivals, JP Morgan and UniCredit.
In 2015, the US financial giant completed the same number of deals in a tough year, worth a combined total of $4.2bn. In fact, scroll through any of the major regional deals of the past 15 months and chances are, Citi is involved somewhere along the line. “There are few deals they aren’t involved with,” said a London-based debt capital markets banker. “They always take the region very seriously — I can’t see that changing.”
Citi led Bulgaria’s €2bn sale of seven and 12 year notes in March 2016, working alongside BNP Paribas, JP Morgan and UniCredit. Bulgaria’s ground-breaking €3.1bn sale of seven, 12 and 20 year paper a year earlier was arranged by Citi and UniCredit along with HSBC and Société Générale. It was lead arranger, with JP Morgan and a brace of domestic brokerages, Kazkommerts Securities and Halyk Finance, on Kazakhstan’s $4bn dual-tranche sale in July 2015; and it co-underwrote Poland’s tough and troubled €1.75bn January dual-tranche sale.
In truth, there are few emerging Europe sovereigns that do not, when mulling the sale of paper, feel the need to hire the New York-based financial institution. It’s hard to see that changing.