CEE Bonds

Russian Standard Bank is continuing its debt management programme and surprised analysts with an early buyback of its 2017s on Monday.

The Russian economic crisis this week boosted participation in a tender offer for Evraz's 2015 bond. Investors accounting for $278m of Evraz's $576.7m 2015 notes agreed to a company buyback of the note at just over par.

Russian authorities are mulling forcing international rating agencies to continue rating all Russian entities, including borrowers subject to US and EU sanctions.

Some investment grade corporate bonds and credit default swap spreads have been rocked in the past weeks by the collapse in the Russian currency and political instability in Greece, but investment grade oil companies’ bonds are holding up relatively well.

Tuesday was the messiest day in Russian bond, equity and currency trading since the 1990s. But analysts and investors have come out of the storm on Wednesday saying that while risks exist and have increased, they are only moderately worried about Russian defaults next year.

Gold producer Nordgold has completed a $50m buyback of its 2018 Eurobonds, a move that analysts said sends a positive signal in to the market.

In a bid to support the weakened rouble, the Central Bank of Russia surprised the market on Monday night, hiking its main policy rate by 650bp to 17%. But the move has failed and has only served to demonstrate that even Russia’s hardiest investors have finally given up.

Agroton Public, the Ukraine-based agricultural company, has further delayed interest payments on its $50m notes due 2019 after bondholders voted in favour of the extraordinary resolution on Monday. The company’s operations have been severely impacted by the fighting in eastern Ukraine and analysts say its financial outlook is dire.

Russian Standard Bank has increased the late consent fee it is offering investors in a tier two capital bond to upgrade the security to new norms, after failing to entice enough investors before the early bird deadline.

It’s no secret that Russia right now is not great for business. Tough sanctions and terrifying fines have led many banks to conclude that it is not worth keeping expensive bankers covering clients which will not be doing deals until Putin or the West back down.

Fears that the Ukraine may suffer a sovereign default have intensified after the IMF found the country needed an additional $15bn to avoid financial collapse. While the IMF and US may get the country through the current liquidity crisis, its longer term outlook is now very weak — with one research house putting the likelihood of its 2017 debt being rescheduled at 70%.

Turkey Akbank’s German subsidiary, Akbank AG, has postponed its planned euro denominated bond. Uralsib is now the only EM issuer in the pipeline that has completed investor meetings and not officially delayed its bond. The Russian bank finished meetings for a subordinated bond on November 20 via JP Morgan and UBS. Bankers away from that deal say that the note is unlikely to be printed before the end of the year but there may be one other new issue next week.