CEE Bonds

Uzbekistan opened a new chapter in emerging market bonds on Wednesday, printing a $1bn dual tranche deal. Market participants are expecting a swathe of other issuers from the country to follow the sovereign into the capital markets, although soggy trading on Thursday has stiffened investor resolve to hold firmer on pricing on subsequent Uzbek deals, writes Francesca Young.

In the emerging markets over the past year the art of bond investing has often felt like perfecting the skill of mitigating disaster — of knowing when to catch a falling knife or jump on a rebound before everyone else does.

Vakifbank has found competitive funding with a privately placed covered bond, its second of the year, sold via sole lead manager Credit Suisse, even though the publicly syndicated Turkish covered bond market has been closed for some time.

Uzbekistan printed its $1bn dual tranche five and 10 year bond on Wednesday to great investor excitement, but the bubble was punctured on Thursday when both traded down in the secondary market. That was despite orders as big as $300m from one international EM account, according to Uzbekistan’s deputy prime minister and finance minister, Jamshid Kuchkarov.

The Turkish sovereign’s third bond of the year, a sukuk, was priced with no new issue premium on Wednesday, paving the way for Türk Telekom to come to market.

The Republic of Turkey has tightened price guidance for its three year sukuk to 5.9% area, with books for the deal in excess of $3.5bn.

The Republic of Uzbekistan has released initial price guidance for its dual tranche five and 10 year dollar bonds and a rush of investors showed how desperate they are for a piece of it.

Uzbekistan's bond market debut, which is expected to be priced as early as Wednesday, has captured the attention of emerging market investors.

Credit Bank of Moscow has tightened price guidance for its euro five year bond, with books in excess of €800m for the Reg S/144A note — an unusual format for a euro deal, but one designed to provide a fall back option of switching to dollars if pricing for the bank’s inaugural euro bond was deemed unfavourable after feedback.

Uzbekistan has told investors that it is focused on a dual tranche five and 10 year transaction and that indications of interest received so far are in excess of $1.5bn.

Turkey has picked banks for its third benchmark of the year and its first since 2017 to be issued using sukuk documentation. Bankers say another Turkish borrower could mandate before the end of the week.

Akbank is kicking off the first set of refinancings of the year for Turkish banks, launching its syndication with a smaller volume and tighter margins than last year’s deal. But lenders are divided on whether the deal represents an achievement for the Turkish bank, or betrays an outlook festooned with risk. Mariam Meskin reports.