CEE Bonds

Competition is becoming much fiercer in the Turkish banking sector. After years of rampant loan growth in many markets, banks will have to fight much harder to find new customers and bigger margins in the future.

Turkish banks are looking to mortgage-backed covered bonds to close asset and liability mismatches and reduce borrowing costs. In the next few years, the asset class will become a cornerstone of their funding plans. Tyler Davies reports.

Political uncertainty has provided a volatile backdrop for investors in Turkey over the last year, making the growth in its economy all the more impressive. But as Philip Moore reports, the country’s economic resilience will be severely tested this year.

Buttressed by vibrant domestic demand and supported by weak global commodity prices, Turkey’s economy continues to post solid growth. In this interview, treasury undersecretary Cavit Dagdas explains how Turkey’s medium term programme (MTP) will underpin continued growth.

Russia this week printed its first Eurobond since 2013. But the $1.75bn deal — hobbled by Western banks refusing to lead arrange, Euroclear declining to confirm it would settle the bond and compliance teams halting some fund managers from participating — was not a straightforward issue. Debate rages as to whether the exercise has done the sovereign more harm than good.

The Republic of Turkey has set roadshow dates for an outing in the sukuk market, edging closer to finishing off its $4.5bn external funding requirement for this year.

Croatia has picked four banks for a euro-denominated bond and is embarking on investor meetings for the deal next week.

Russia has sold its first Eurobond since 2013, drawing a book of over $7bn, according to analysts, but with doubt still high as to what proportion of that figure was from true overseas buyers.

High profile sovereign bonds have dominated CEEMEA markets so far this week. Russia returned on Tuesday with its first deal since 2013, but not with the international slam-dunk the sovereign was hoping for. Elsewhere Qatar started book building for its long-awaited bond.

Russia’s $1.75bn sovereign Eurobond showed that the country can raise external financing, but that does not necessarily mean that the deal will be recorded as a political success.

Russia has not updated the guidance it released on Monday for its first bond since 2013, with a debate over whether Euroclear will settle the note deterring some investors.

Russia released on Monday price guidance on its first sovereign Eurobond since 2013, and its first since the US and the EU imposed sanctions on several state-owned companies in 2014.