CEE Bonds

News last Friday from the London Stock Exchange (LSE) that Oleg Deripaska is set to give up his control of Rusal by removing his majority stake in EN+ (Rusal’s parent) is the best possible outcome at this point for the US, for Russia, and for investors.

Energo Pro, a hydro power plant operator and electricity distributor in Bulgaria, Georgia and Turkey, opened books for its €250m bond issue at 4.5%-4.75% on Friday, higher than the low to mid-4% it originally indicated.

Three CEE new issues are in the works: Bulgarian Energo Pro is hoping to print its bond as soon as Friday, Hungarian fertiliser company Nitrogénművek is looking to issue €200m with a new euro seven year non-call three bond, and Wizz Air has received its first ever credit rating, a likely precursor to a bond issue.

Turk Eximbank raised $500m with its new six year bond on Thursday. While one banker on the deal said there was some buyside reticence to get involved with Turkish risk, meaning that a higher new issue premium was required, another claimed the premium paid was in line with the rest of the market.

The Development Bank of Kazakhstan was set to price its tenge denominated Eurobond on Thursday evening in London from a book that was at the last update approaching Kt140bn.

Energo Pro, a hydro power plant operator and electricity distributor in Bulgaria, Georgia and Turkey, finished its roadshow in Wednesday and is planning to bring a euro-denominated bond as early as Friday.

The Development Bank of Kazakhstan (DBK) has released price guidance for its second tenge Eurobond in five months.

Turk Eximbank on Thursday* opened books on a new six year bond following the Central Bank of Turkey’s decision to hike rates by 75bp the day before.

Eastern European low cost airline Wizz Air has received its first ever credit rating, a likely precursor to a bond issue.

Investors in Rusal’s bonds have lost this round. But the game of investing in Russia has not finished yet.

Two corporate issuers are meeting investors for euro denominated bonds this week as the corporate funding season gathers pace.

With the shock of the latest round of Russian sanctions receding a little, EM investors are already seeking out the opportunities that last week’s volatility created. Even one holder of the sanctioned and problematic Rusal debt said he has increased his exposure to Sberbank.