CEE Bonds

Turkey’s inflation fell for the second month running in December, prompting some analysts to predict that the central bank will cut the main interest rate in January, much to the concern of syndicate bankers.

Russian financial markets were greeted with mixed news on Wednesday after the US Treasury announced sanctions relief for EN+ and Rusal on the same day as imposing more sanctions on Russian individuals.

Banks with large exposures in Romania took a beating in the financial markets on Wednesday, after the country’s government unveiled plans to introduce a new tax on banking assets.

Once a darling of emerging markets investors, Turkey flirted with disaster in 2018 when instead of battling out-of-control inflation it followed voter-pleasing policies and plunged into a recession, amid a poisonous combination of political and monetary forces. Although Turkey and its banks have swiftly regained debt market access, its future is clouded by the harsh realities of global economics, write Lewis McLellan and Mariam Meskin.

The US slammed the international bond market shut to Russian borrowers in April by imposing sharp sanctions on a few private companies. Seven months later Gazprom sold a euro bond, but it is a unique credit. Investors are still terrified of another kicking from Western authorities. Francesca Young speaks to Russian borrowers about how they are planning their funding in uncertain times.

Hungary’s latest Panda looks, at least on paper, like a club deal rather than a genuine syndicated bond, with bankers disagreeing on how the deal might have played out in the market.

The Turkish Central Bank has, much to the relief of many in capital markets, kept its central interest rate steady at 24%, paving the way for the sovereign to return to the bond market in January.

Alpha Bank Romania is preparing to sell a new deal in euros in the first quarter of 2019, in what would be the first ever issuance of covered bonds from the country.

Hungary is planning to sell a Rmb2bn ($290m) three year Panda bond on December 17, becoming the first and only sovereign returnee to the market.

Akbank, one of the largest banks in Turkey, is preparing a TL3bn ($558m) rights issue amid fears of an increase in non-performing loans as the Turkish economy enters a slowdown.

The first green bond from a Slovenian borrower came to market this week. SID Bank will use the proceeds for green mortgages and financing low carbon aircraft.

The Turkish government is mulling plans to print asset backed securities against the country's banks' mortgage stock. Some are calling the idea a “bad bank in disguise”. It isn't, but Turkey will need one.