CEE Bonds

The Federal Reserve is losing confidence in the US economy, global economic growth is flagging and Treasury yields are staggeringly low. Emerging market assets, meanwhile, are full of beans, as low rates and healthy risk appetite provide a magic combination for EM companies looking to raise capital. But the Fed is worried for a reason: there’s trouble ahead, write Lewis McLellan and Sam Kerr.

Magnitogorsk Iron & Steel Works (MMK) broke a 16 year bond market hiatus with a five year dollar benchmark on Wednesday, raising $500m without paying a new issue premium.

PKO Bank Hipoteczny issued its debut green covered bond on Wednesday, the first deal of its type from Poland. This deal is the ninth covered bond with an environmental and social governance (ESG) purpose to have been launched this year and, according to Commerzbank research.

Slovenská sporiteľňa’s first euro benchmark covered bond attracted strong demand from investors on Wednesday reflecting the transaction’s tempting returns in a largely negative yielding market, as well as its top credit rating.

Magnitogorsk Iron and Steel Works (MMK), the second largest steel producer in Russia, released price guidance for a $500m five year bond on Wednesday at a level that one EM investor said looked “interesting”.

Buyers of Russia sovereign bonds could get burned as the US contemplates new sanctions against the country. But it seems they and Russia's public debt officials have not made it to the end of HBO's Game of Thrones. Had they done so, they would have learned a valuable lesson. They must do so quickly.

Georgia’s largest commercial bank TBC Bank is on the road to promote a dollar benchmark. The deal coincides with the bank’s push into its neighbouring markets, Azerbaijan and Uzbekistan. The bank is spearheading the move with tech platforms.

Slovenská sporiteľňa mandated leads on Tuesday for a euro-denominated mortgage covered bond. It was a slow start to the month in covered bonds, but the Slovak issuer could break the quiet.

Renaissance Credit has announced its intention to come to market for a Reg S euro subordinated bond. The trade will be the borrower's first trip to the market in almost six years.

To believe their PR, banks are now paragons of clean, sustainable economic development.

Ukraine will have to wait until after its snap parliamentary elections to arrange its next disbursement from the IMF, but the country will rely on the domestic market to meet its refinancing needs.

The Russian sovereign could soon issue its next Eurobond, with both euros and dollars on the table. But if it does launch a deal, the move will be as much financing as it will be a political play to help defend the country from more US sanctions. Francesca Young reports.