CEE Bonds

After spending 2016 away from the high yield market, UK premium car maker Jaguar Land Rover returned on Tuesday to add euros to its all sterling and dollar debt.

Reducing Hungary’s FX liabilities continues to be one of its debt management office’s (AKK) driving factors, but CEO György Barcza also remains committed to diversifying the country’s funding sources. With a Japanese yen bond maturing, and a €1bn bond planned, 2017 looks set to offer investors some rare opportunities to buy into Hungary’s improving debt story.

Turkish borrowers face a tough year as security concerns about the country threaten access to a funding market that is already expected to suffer volatility. But bankers say it is business as usual in Turkey, and investors agree that Turkish spreads are still an attractive prospect.

Emerging market bankers are optimistic for a busy first quarter after markets opened on Tuesday in a much stronger position than they had a year ago. Sovereign issuers from the Middle East and CEE are expected to lead the charge.

In late 2016 a clutch of Russian borrowers shrugged off Western sanctions and domestic stagnation to return to the global bond markets. But will investors’ returning appetite for Russian risk survive a global repricing? Lucy Fitzgeorge-Parker reports

China and Russia are forging ahead with closer financial market ties, with the Moscow Exchange (Moex) and Shanghai Stock Exchange (SSE) looking to facilitate two-way investments between the countries. This comes as the Russian ministry of finance is still finalising plans for the first RMB-denominated bond to be issued in Russia.

Alfa-Bank defied low pre-Christmas liquidity levels to print a $300m increase of its AT1 that was sold to a greater proportion of international investors than the original October print, according to a lead banker.

Gazprom plans to borrow $4.7bn in external debt next year, it said in its 2017 budget.

Russia’s Alfa-Bank re-opened its $400m Basel III additional tier one trade on Tuesday morning, marketing the perpetual note at 8%.

Russia’s Alfa-Bank is planning a tap of its additional tier one securities and will open books on Tuesday this week, according to the leads. As the deal was sold mostly to Russian domestic investors, there are not the usual concerns about pre-Christmas liquidity.

Ukraine’s government on Monday nationalised troubled lender Privatbank, but questions are as yet unanswered for holders of outstanding Eurobonds which are expected to be bailed-in, according to frontier markets investment firm Exotix.

Poland broke new ground this week, issuing the first ever sovereign green bond. The deal offers a template to future sovereign borrowers, even though some dedicated SRI accounts would like to see future issuers more clearly identifying projects to finance, writes Virginia Furness.