CEE Bonds

Turkey’s central bank stepped in on Wednesday to stem the collapse of its currency, delivering an emergency 300bp increase, but market commentators deemed the move too little, too late, saying investors' confidence in the bank remained impaired.

Bank Gospodarstwa Krajowego (BGK), Poland's state development bank, printed its dual tranche euro bond on Wednesday in a tough market that allowed for no tightening from initial price guidance and book that was only just covered.

Polish financial institution mBank has returned to the Swiss franc bond market. Like many sold in the past few weeks, the bonds were priced at the wider end of guidance — a sign that the market is returning to more conventional spread levels, and investors are expecting higher returns.

Conviction levels are low among emerging market investors with many waiting on the sidelines this week as geopolitical risk and local currency weakness persist in wreaking havoc on EM bonds.

Bank Gospodarstwa Krajowego (BGK), Poland's state development bank, has set the reoffer spreads for its seven and 12 year euro bonds. Combined books are in excess of €800m, evenly split between the tranches.

The UK's foreign affairs committee report, released on Monday, holds the US Treasury’s sanctions strategy in high regard, because of the immediate impact on financial markets. But it misunderstands the reason for the US-driven sell-off, and so its recommendations are faulty as well.

The UK Foreign Affairs Committee on Monday recommended “closing the loophole” that allows Russia to continue to support its sanctioned banks and companies, by prohibiting persons in the EU from buying Russian debt where the bookrunner is a sanctioned entity.

Sometimes, investors get hit by political events that come out of nowhere. Other times, they walk straight into an oncoming freight train, even though it's blowing its horn at top volume.

Turkish president Recep Tayyip Erdoğan sent the country’s sovereign bond yields flying this week as he vowed to take more responsibility for monetary policy if he wins next month’s elections. His comments prompted another sharp dive in the value of the Turkish lira — felt strongly by the country’s dollar debt issuers — as investors feared that even if the central bank does hike rates to defend the currency, the measure could be soon reversed. Francesca Young and Mike Turner report.

Equity and bond investors hoping for the Turkish central bank to step in and cool its overheating economy will be dismayed by President Erdogan’s pledge to influence its decisions. But they should not be surprised.

Bank Gospodarstwa Krajowego, the State Development Bank of the Republic of Poland, is marketing a dual tranche euro bond.

The last two weeks have been the toughest in recent memory for emerging market bond investors who have seen their assets in local currencies and dollars alike take a hammering amid the collapse in the Argentine peso and Turkish lira.