CEE Bonds

Investors are aghast that Turkey’s national election board has cancelled the results of the Istanbul mayoral race, which the country's president Recep Tayyip Erdogan’s ruling party lost in March, and ordered a rerun. The country’s currency and CDS took a hit on Tuesday and is still reeling.

Three new high yield issues were launched into marketing in Europe on Tuesday, including a pay-if-you-can bond, even though the market was a bit weaker after President Donald Trump’s sabre-rattling about raising trade tariffs on China.

Turkey’s national election board has cancelled the results of the Istanbul mayoral race that president Recep Tayyip Erdoğan’s ruling party lost in March and ordered a rerun. This is widely thought of internationally as a blow to democracy, and in Istanbul citizens have taken to the streets in protest. But Erdoğan’s behaviour has been so unpredictable in the past year that there is hope the rerun in June will be free and fair enough for investors to breathe easy. It seems a bet made more in hope than expectation.

Czech Railways (České dráhy), the 100% state-owned Czech national railway operator, is embarking on a European roadshow for a seven year bond.

Emerging market bankers and investors have been reacting to this week's attempt by the Venezuelan opposition to unseat president Nicolás Maduro, with some worrying that Russia's support for the government once again raises the risk of sanctions against that country.

Republican senator Lindsay Graham called for more sanctions on Russia over the weekend, but the threat of these sanctions seems to have become toothless, as foreigners' appetite for exposure to Russia and the rouble has increased in the last few months.

Turkey’s central bank on Thursday kept its policy rate at 24% and removed a commitment to tighten monetary conditions further if needed. The announcement disappointed investors, and is expected to intensify the sell-off in the lira.

Ukraine might be angling for an opportunity to issue a Eurobond, but with a new president-elect unsettling capital markets and IMF relations best described as frosty, investors would rather the sovereign held off.

The Development Bank of the Republic of Belarus raised $500m with its first ever Eurobond on Wednesday, slicing 25bp off its yield from initial price thoughts.

The Development Bank of the Republic of Belarus has released initial price guidance for its Eurobond debut at 7% area for a five year Reg S/144A dollar bond. A banker away from the deal called the level fair.

A softening in Ukrainian bond spreads may prompt the country's debt management officials to drag their feet over issuing its next public bond. It would be better for them to get moving.

DCM bankers are expecting a sovereign bond from Ukraine imminently, after Vladimir Zelensky, a 41 year old Russian-speaking comedian, won the country's presidential election on Sunday.