CEE Bonds

Russian gold producer Polyus Gold earned praise from its lead managers for not over-tightening pricing on a new bond on Tuesday after the poor performance of an aggressive deal from compatriot Rusal last week.

Even with much of Asia inactive due to the Chinese New Year holiday, emerging market bonds seemed a more nervous market this week with only one issuer braving a deal.

Polyus Gold, Russia's largest gold producer, showed little regard for leaving something on the table for investors on Wednesday as it screwed pricing in for its new six year note. But investors will support the trade regardless, said emerging markets bankers.

Turkey found itself firmly in junk territory on Friday after it lost its last investment grade rating from Fitch, but the issuer’s CDS has tightened in response and as Turkey’s blowout trade on January 18 attests, it always has the capability to fund.

Rating: B/B+

Agribusiness Kernel proved the right credit to bring Ukrainian corporates in from the bond market on Tuesday. After a rough ride of corporate restructurings, the inaugural issuer was able to garner the confidence and trust of investors to raise $500m.

Russian supply returned to the eurobond markets this week with a hugely successful debut deal from aluminium producer Rusal and the promise of further dollar supply from Polyus Gold.

After a raft of highly rated sovereigns, two single-B rated borrowers appeared this week to offer the first opportunity to buy true emerging market credit from the CEEMEA region this year. One deal was a record for its type while the other reopened a market dormant for years. Virginia Furness reports.

Russia’s Rusal was on track to print the first corporate bond from the region of 2017 on Thursday but with 13 banks on the trade, the pricing debate was proving to be furious.

Agribusiness Kernel proved the right credit to bring Ukrainian corporates in from the cold on Tuesday. After a rough ride of corporate restructurings, the inaugural issuer was able to garner the confidence and trust of investors to print $500m.

Polyus Gold is plotting a rapid return to the Eurobond market following its successful outing in October last year.

Holders of newly nationalised PrivatBank’s Eurobonds are pushing back on the National Bank of Ukraine’s plans to bail-in the debt, but the government should not have to take on the liabilities of sophisticated lenders in event of a default. But it does need to be much clearer about its plans.