CEE Bonds

Despite the strong success of several emerging market issuers — Halkbank, National Bank of Abu Dhabi, and Eustream — with bonds last week, other borrowers have refrained from issuing so far this week, leaving the focus on liability management, mandates and roadshows.

Severstal has bought back $221.4m of its 2016 and 2017 bonds after raising the buyback price last week. The Russian steel company had hoped to buy back up to $600m of the bonds.

Alliance Oil has announced a consent solicitation on its $350m 9.875% 2015s but only registered bondholders will be told exactly what the issuer is looking to do.

Ferrexpo has increased to 25% the cash component of its exchange offer. The borrower has struggled to secure bondholder approval to exchange its $500m notes due 2016 and had already extended the early bird deadline.

Turkey's Halkbank priced its new $500m six year bond with a 2bp-3bp new issue premium on Wednesday, but the underlying swap rate had rallied 10bp throughout the day, meaning that the nominal premium was perhaps more attractive than it otherwise would have been.

Ferrexpo, a Ukrainian iron ore pellet exporter, is struggling to secure bond holder approval to exchange its $500m notes due 2016 and has extended the early bird deadline to February 17. A group of activist investors are trying to squeeze the borrower for a bigger cash component, according to a liability management banker.

Slovakia’s Eustream printed a €500m no-grow 10 year bond at 200bp over mid-swaps on Thursday late afternoon in London, the first investment grade corporate deal out of central and eastern Europe so far this year.

Severstal, Promsvyazbank and Russian Standard Bank, three Russian borrowers, were in the market with liability management exercises this week amid a rising tide of deals, but bankers said that the flow is a coincidence rather than indicative of a trend.

Eustream has released price guidance for a €500m no-grow 10 year bond at 220bp area over mid-swaps. The deal is expected to be priced later on Thursday.

Russia's privately owned bank Promsvyazbank has launched a cash tender for its subordinated $200m 11.75% 2016s, its senior $400m 8.5% 2017s and its subordinated $600m 10.20% 2019s. The move is a show of strength from the bank as well as a routine management of the bank’s own liquidity and capital, said a liability management specialist on the note.

Turkey's Halkbank priced its new $500m six year bond with a 2bp-3pb new issue premium on Wednesday but the underlying swap rate had rallied 10bp throughout the day meaning that the nominal premium was perhaps more attractive than it otherwise would have been.

Halkbank is on track to price the third financial bond from Turkey this year and is out in the market with a new $500m six year bond.