CEE Bonds

In a rare instance for CEE countries, Romania has printed 30 year dollar bonds.

Slovakia, Croatia and Romania dived into the primary bond market this week — all keen to take advantage of what has been by recent standards a rare period of market stability to print.

Romania has released initial price guidance for a dollar bond offering around a 30bp-40bp pick-up over its outstanding curve, according to a banker away from the deal.

The Republic of Croatia pulled pricing for its €750m 2.7% 2028 bond 30bp tighter than initial price guidance on Wednesday, bringing the reoffer spread nearly flat to the outstanding curve.

The Republic of Croatia released initial price guidance for a 10 year bond on Wednesday morning and books for the deal are already in excess of €1.3bn.

Slovakia sold 10 year and 50 year bonds from a combined book of over €5bn on Tuesday, the first European sovereign bond since Italy-led volatility last week turned government bond traders’ screens into a kaleidoscope of reds and greens. It was also the longest CEE print in over a decade.

Slovakia revised pricing downwards on its rare 50 year bond on Tuesday morning, after taking books of over €5.3bn with the first trade from the central and eastern Europe region for nearly two weeks.

The Slovak Republic is exploring the possibility of issuing a rare 50 year euro-denominated bond as markets stabilise after a tough week.

EPP, a Polish real estate investor specialising in shopping malls, has mandated banks for a euro bond, joining Atrium European Real Estate in the rush to issue the first non-financial corporate bond from CEE since early May.

The recovery of Turkish asset prices this week is less the result of prudent monetary policy — though that certainly helped — and more a lesson in the benefits of the personal touch and that markets are, ultimately, populated by humans.

Turkish dollar bonds outperformed in a heavy market this week after the Central Bank of the Republic of Turkey (CBRT) moved to simplify rates in order to protect the lira. The recovery of the lira to below TL4.5 to the dollar has been taken by the market to indicate that last week’s rate hike was a success.

The Panda bond pipeline is bursting at the seams with red chip Chinese names and SSAs preparing for renminbi deals, prompting some in the market to predict a new era of growth for the asset class.