CEE Bonds

Turkey's Yapi ve Kredi Bankasi astonished the market on Wednesday by seeming to accomplish what looked like an impossible feat — pricing a $500m five year bond in a day where its curve was sent 25bp wider in spread terms by US Treasury volatility.

Fitch has issued a guarded opinion on recent changes to the Polish covered bond law that had been expected to improve issuance prospects. The amended law, which introduces pass-through structures and mandatory liquidity facilities, should have theoretically led to higher ratings. But the agency said the impact of the new regulation may in practice be more modest by not pushing ratings down.

Turkish Yapi ve Kredi Bankasi astonished the market on Wednesday by seeming to accomplish what looked like an impossible feat — pricing a $500m five year bond in a day where its curve was sent 25bp wider in spread terms by US Treasury volatility.

Gazprom is considering pricing a dollar or euro benchmark bond before the end of this year. Any potential euro deal would be placed by Deutsche Bank and Crédit Agricole. US banks would be used for a dollar deal, but the mandate for a potential dollar note has not yet been signed.

Turkish Yapi ve Kredi Bankasi has released initial price guidance of 375bp over mid-swaps for a dollar five year benchmark bond, offering around a 20bp-30bp premium over its own interpolated curve, according to a banker away from the deal.

Hopes have been fading that the sukuk market will see a record level of dollar issuance in 2014, with bankers suggesting that there may be only two or three more international deals to print before the end of December. But with Flydubai setting its sights on an earlier debut launch than previously expected, the year could still be on for a photo finish with 2012.

Finansbank sold its fourth dollar denominated MTN on Monday, as Turkish banks’ high yields are attracting short term investors away from emerging market stalwarts including India and China.

Banks in the eurozone are piling into the Russian rouble bond market. They want to source as much financing as possible locally to limit cross-border exposure in the face of Western sanctions

Romania is planning to issue a long euro benchmark and has picked four banks for the deal.

Russia’s liquidity-parched banks are ready to sidestep their exclusion from international capital markets by issuing domestic bonds in foreign currency. While the local non-rouble market is still in its infancy, sizes of up to $1bn are under discussion for the new issues — with the country’s sovereign wealth fund a potential buyer.

Turkiye Sinai Kalkinma Bankasi (TSKB) has picked banks for its inaugural dollar bond and kicks off investor meetings next week.

Czech Raiffeisenbank has mandated leads for the first publicly distributed euro-denominated benchmark Czech covered bond, which is expected to be launched following a roadshow. The transaction, which is eligible for repo with the European Central Bank and documented under English law, is likely to be followed by a string of other euro denominated Czech covered bond benchmarks.