CEE Bonds

Turkey’s decision to launch a military offensive in Syria has reopened the possibility of sanctions from the US, with its Senate introducing a bill to do so on Wednesday. However, the investor community is doubtful about their impact.

Kernel, a Ukrainian agricultural producer, hit the market on Thursday with a five year non-call three bond and raised $300m with a trade that bankers said was tricky to price.

Kernel, a Ukrainian agricultural producer, hit the market on Thursday with a five year non-call three year. In spite of fears around Ukraine’s future relationship with the IMF, the leads have set initial price thoughts at a level onlookers are calling “aggressive”.

US president Donald Trump’s salvo of tweets against Turkey, which threaten economic sanctions, have had only a muted effect on the Turkish curve, as investors' scepticism towards Trump grows.

Russian potash producer Uralkali is going on the road for five year dollar paper, returning to the international market for the first time in six years.

Rating: —/—/BB

Nordgold and Veon Holdings both printed bonds on Wednesday. But a difficult market backdrop forced Veon to print at a smaller size than expected and at a wide end of revised guidance. The execution of Nordgold’s bond seemed smoother, but investors said it was struggling to stay above reoffer on Thursday morning.

Swiss investors’ thirst for yield was quenched in some style at the end of last week, when Russian Railways printed the largest Swiss franc transaction of the year from an emerging market borrower.

Ukrainian steel and mining company Metinvest sold a dual tranche dollar and euro bond on Tuesday, but an inability to tighten from initial price guidance and poor trading in the secondary market on Wednesday had some investors worried that the perfect window for EM issuance is closing.

A pair of CEE corporates, Veon Holdings and NordGold, released initial price guidance for bonds on Tuesday, both offering paper after a break from international issuance.

Initial price guidance has been set for two corporate bonds from issuers in the CEE region — EP infrastructure and Metinvest. Both deals expected to be printed later on Tuesday.

Sovcombank printed a tier two bond on Monday at the wide end of guidance and the lowest end of the expected size range, which an investor said was a sign that the deal was “struggling” over the line. But a lead manager on the note pointed to healthy trading on Tuesday and its debut status and said that the issuer had simply taken sensible decisions after an in-depth price discovery process.