CEE Bonds

Mobile TeleSystems (MTS) has launched a tender offer on its 2020 bonds on Wednesday, becoming the latest Russian corporate to buy-back its dollar debt.

Three stellar trades last week from Russian corporates did more to prove that the Russian bond market is open for business than the much-hyped $1.75bn sovereign issue. But this was no surprise as investors had been scrambling to get their hands on Russian corporate debt for two years.

Sberbank CIB, the corporate and investment banking business of Sberbank, has appointed a new head of its global markets department.

Bulgarian Telecommunications (Vivacom) has received the necessary waivers from bondholders to allow its proposed acquisition by a consortium of investors, following a bridge loan default last year that triggered a forced sale of the company.

Sovcomflot, Evraz and NLMK issued nearly $2bn of bonds between them this week, and strong demand, especially from local investors, led to dramatic price tightening.

Three Russian corporates had no problems accessing the dollar market this week, setting a strong precedent for the $40bn worth of redemptions in 2016 and 2017.

After a stellar book for Novolipetsk Steel's (NLMK) new issue on Wednesday, trades from Sovcomflot and Evraz on Thursday morning will test the true level of investor appetite for Russian corporate debt.

Despite the recent rush of Russian corporate bond activity — three new issues are expected this week — the sector still has its outliers with Far Eastern Shipping Company (Fesco) receiving a downgrade from Fitch on Tuesday to restricted default after missing a coupon payment last week.

Novolipetsk Steel’s book build was a riot on Wednesday morning as investors clamoured to get hold of paper from the first of the three Russian corporates carrying out liability management exercises this week.

China’s curb on capital outflows means the Panda bond market is yet to live up to the excitement generated by a series of high profile transactions last year. But György Barcza, CEO of the Hungary Government Debt Management Agency, is committed to pushing out a transaction even if the ability to repatriate proceeds offshore remains uncertain. Rev Hui reports.

Sberbank believes around $20bn of the $30bn of non-distressed Russian corporate Eurobonds maturing in 2017-2018 could be bought back or replaced with new, longer-dated bonds in the near future.

Ukraine and the US have signed an agreement for a further $1bn of loan warranties to be used on a five year Eurobond issue.