CEE Bonds

Emerging markets got off to a cracking start for the year this week with a slew of sovereign deals hitting screens. High quality, low beta sovereigns Israel and Slovenia began proceedings with impressive euro deals.

Turkey made its first capital markets foray of the year with a $2bn bond issue on Wednesday. But bankers were divided on the deal's success.

Yapi Kredi sold the first ever public additional tier one (AT1) bond from Turkey on Wednesday, which leads said would act as a benchmark for future issuers from the country despite the deal having been largely sold to the borrower’s shareholders.

Turkey has come to market for a 10 year dollar benchmark, reasserting its status as one of emerging market bonds' most frequent borrowers after a turbulent 2018.

Yapi Kredi, the Turkish bank, has set the pricing for its additional tier one bond though eschewing a “traditional bookbuild process”.

Emerging markets have leapt back into action as investors take full advantage of the wider levels on offer in the asset class. Even some of the sector’s most turbulent credits are coming to market.

An old argument has rattled on for years between some CEEMEA issuers and banks about the wisdom of paying nothing to banks to arrange sovereign bonds. Uzbekistan has settled it.

Yapı ve Kredi Bankası is planning an additional tier one dollar benchmark that looks likely to be the first issue of non-sovereign international bonds from the country since April.

Slovenia hit screens with the first sovereign bond of 2019 on Monday, undergoing some price discovery but closing a successful deal and paving the way for other countries to follow suit.

The Slovenian government is out with a 10 year euro bond issue on Monday, which will be priced later today. Bankers away from the deal say the highly rated issuer is a good soft test of investor appetite for CEEMEA debt.

Emerging market issuers are hesitant to rush back into the market in the new year. Most are waiting on the sidelines until the tone becomes more settled and investor desks are fully staffed.

Uzbekistan could announce roadshow dates as early as next week, having put ratings in place and picked banks for its debut Eurobond.