CEE Bonds

Books for Poland coal firm, Kompany Weglowa’s bond closed on Friday but with no update as yet on pricing, bankers away from the deal have become curious as to whether the deal has been postponed. But the bond is still live, said a syndicate official on the note.

Gazprom’s $700m one year deal this week was brought to market with the best of intentions. The company wanted to re-open the international dollar bond market for other Russian issuers and felt that it was its duty to do so, being the only big state-owned borrower not subject to capital market sanctions.

Gazprom’s dollar deal on Wednesday may have grabbed the attention of emerging markets bankers eager to see Russian borrowers back in bonds, especially as it was twice subscribed. But any hopes of a flurry of Russian comeback issuance were shot down by bankers away from the deal in London who said a number of factors dented the trade's credentials as a pathfinder for the energy giant's compatriot borrowers.

Gazprom’s potentially market re-opening $700m one year bond has been twice subscribed. US investors have even been calling the company to complain about being scaled back in the allocation process on the Reg S/144A deal, signalling a u-turn in investor appetite for Russian risk.

Gazprom is planning a one year dollar bond and has released price guidance at a yield of 4.75%-5%.

Kompany Weglowa has released initial price thoughts for a dollar benchmark five year bond at 9% yield area. As the company is 100% state-owned, this will make the bonds eligible for JP Morgan’s EMBIG (Emerging Market Bond Index Global) index. Syndicate officials away from the deal praised leads for having made this clear early as they said this, together with the bond's juicy yield, would likely drive demand higher.

Turkish port operator Global Liman İşletmeleri (Global Ports) on Thursday reduced its debut bond issue by $25m to $250m and priced it at with an 8.125% coupon at a reoffer price of 99.345.

One of two Polish coal company deals on Tuesday disappeared off of screens as Jastrzębska Spółka Węglowa postponed its bond issue. That left Kompany Weglowa (KWSA) in the market with bankers away from the remaining deal apprehensive about the levels of demand. This was despite a banker on the deal saying the success of either company in the bond market would have no bearing on the other.

Rating: Ba1/A-/BBB+

Czech Raiffeisenbank priced the first publicly syndicated euro benchmark covered bond from the country on Wednesday. At the same time, Toronto Dominion Bank mandated leads for its first Australian dollar covered bond.

Slovenia this week became the latest sovereign to be tempted into pre-funding by the low yields on offer, following deals from Lithuania and Romania last week. The issuer priced a long seven year bond that marks the lowest coupon on any of its outstanding medium to long term euro benchmarks.

Turkish consumer products company, Yasar Holdings, printed its $250m bond on Thursday evening from a book of $620m and well inside initial price thoughts. The success of the EM high yield deal — the first to be printed since the huge US volatility of a fortnight ago — bodes well for other corporates from the region roadshowing bonds.