CEE Bonds

Estonian power company Eesti Energia opened books on a new euro transaction on Thursday morning, following the deadline for a tender offer on its outstanding bonds the day before.

Holders of Privatbank’s 2015 bonds agreed to a reprofiling, the lender announced this week. But the terms of the agreement present those same bondholders with an incentive to scupper a similar agreement on Privatbank’s 2016 notes, analysts said.

Ukraine’s creditors should be concerned that the IMF has not yet defined the status of a $3bn Eurobond that Ukraine sold to Russia, said Ukrainian analysts following a IMF/Ukraine government press conference on Sunday.

Rating: A2/A-/A-

Poland reopened the CEEMEA bond market this week after investors in search of safe havens pushed central Eastern European sovereign spreads tighter. Uncertainty over the timing of a US rate hike has left buyers wary of more typical EM names and left CEE sovereigns among the select few that could avoid paying heightened premiums.

Talk of Russian issuers’ bond plans has been gathering pace this week as Gazprom has mandated for a bond to be printed before the end of this year, sanctioned VEB looks to 2016 for a Panda bond, and Norilsk Nickel embarks on a series of investor meetings.

Bankers are pointing to sovereigns from central Eastern Europe as the best hope for CEEMEA supply although much of the region is bound by the uncertainty of when the US will start to raise rates.

State Savings Bank of Ukraine (Oschadbank) has finished exchanging its 2016 and 2018 Eurobonds into new 2023 and 2025 notes.

Poland made sure CEEMEA was not left out of the September restart rush on Wednesday, but more traditional emerging markets are likely to be left sidelined until after the US Federal Reserve decides to raise interest rates, said debt bankers.

Russia’s Vnesheconombank is in talks to sell Panda bonds, but the note will be placed next year at the earliest, said a source close to the borrower.

Gazprom is planning to issue a Eurobond in the last quarter of this year, and has been in preliminary discussions for a size of €500m-€700m for the deal, according to a source with knowledge of the company’s plans.

Estonia's Eesti Energia is looking to print a euro denominated Reg S bond.