CEE Bonds

Standard & Poor’s is due to opine on Romania’s creditworthiness after markets close on Friday, though analysts think the sovereign will be strong enough to hold on to its investment grade rating despite major political upheaval.

Poland’s prefunding for 2020 may even be higher as a proportion of total funding than the 34% it reached for 2019, said Robert Zima, head of the debt management office (DMO) in Warsaw, thanks to an expected lower budget deficit which means that the country’s total borrowing requirements are set to fall.

The Securities and Exchange Commission has accused Deutsche Bank of hiring relatives of executives of state-owned enterprises (SOEs) in the Asia Pacific and Russia, in order to win business from those entities.

International investors are divided over whether to put more money to work in the Russian domestic bond market after the latest round of US sanctions against the Russian sovereign.

Sanctions on a country’s sovereign debt do not typically herald a windfall of fee-earning bond market business in that country, but Russia may prove an exception. If the sovereign distorts prices in the domestic market, Russian corporates and banks may look to the international market to borrow instead.

Tinkoff Bank, a Russian online bank, may return to the Eurobond market as early as this year as the prices on offer for their international bonds look attractive, even after the latest set of US sanctions on Russia, according to Larisa Chernysheva, head of investor relations at Tinkoff.

Ukrainian energy company DTEK is struggling to halt a slide in its bond trading since the National Anti-Corruption Bureau of Ukraine (NABU) issued notices of suspicion to six individuals — two of whom are DTEK employees — involved in a coal pricing controversy. The bonds have lost around five points in the space of a week.

The rout of the incumbent president Mauricio Macri in the first round of the Argentina elections has investors worried. Argentina’s debt, and that of other 'vulnerable' credits, suffered a huge sell-off early on Monday. But bankers believe that it was not so bad that the primary market will not reopen in September.

Poland's Bank Pekao is planning to tap the Eurobond market for the first time in 2020, in order to set down a senior benchmark for the subsequent issuance of capital ratio raising bonds, according to Pawel Rzezniczak, head of investor relations and corporate development at the bank.

Bankers and investors have expressed their irritation at the US's new set of sanctions on Russia. The latest punitive actions stop US financial institutions from extending debt financing in the primary market to the sovereign.

Emerging market loan bankers have been trying to understand the impact on syndicated lending of the US’s latest sanctions on Russia. The proscriptions have instilled more uncertainty into a collapsing market.

Russia was slapped with sanctions this week that stop US financial institutions from participating in primary issuance from the sovereign. So far, so terrifying as – eek!— Russia’s main artery of finance has been cut. Only it hasn’t been, not really. Don’t be too surprised if the Russia sovereign comes out soon with an international bond to prove it.