CEE Bonds

While pandemonium reigns in the Russian debt markets, neighbouring Ukraine appears to be regaining some stability. Food oil firms Creative Group and Kernel are greasing the way for Ukraine's syndicated loan market to reopen, after violent unrest that began in March caused just $11m of loans to be signed last quarter.

Promsvyazbank priced a $300m seven year tier two note on Tuesday afternoon, narrowly avoiding the fallout from a new set of US sanctions on Russia. The issuer is still conducting an exchange on its older dollar debt, but the turmoil across the Russian secondary market is unlikely to affect the exercise, said bankers on the deal.

Atanas Bostandjiev will be leaving his position as VTB Capital’s international CEO to pursue other business opportunities. Nick Hutt has been appointed interim CEO.

Debt bankers on Thursday’s emerging market bond deals from South Africa, First Bank of Nigeria and Macedonia may have struggled to get hold of some investors, who were focussed solely on selling Russian risk following a fresh round of US sanctions, but they are confident the Russian turmoil will not influence their new trades and the rest of the secondary CEEMEA market has barely budged, said traders.

Macedonia is preparing to print a seven year deal at 4.25% on Thursday afternoon — it's first bond deal is almost a decade.

A fresh round of US sanctions killed the Russian bond market’s nascent recovery, and sent Russian paper plummeting in the secondary market on Thursday. Some syndicate officials ascribed the sharp moves to widespread complacency about the risk of harsher sanctions. But others argued it was a typical knee jerk reaction, and that — despite crushing hopes of Russian issuance in the next few weeks — the new sanctions do not necessarily rule out deals later in the year.

Alternatifbank is preparing to price a $250m five year deal at 143bp over mid-swaps this afternoon — right around where debt bankers off the bond saw fair value — having received over $1.6bn in orders for the no-grow note.

Promsvyazbank priced a $300m seven year tier two note on Tuesday afternoon, and could increase the bond after an exchange offer on its older sub debt ends later this month. Bookrunners on the deal were pleasantly surprised by the strong reception, which came as EU leads meet to debate more sanctions against Russia.

Small emerging market deals are trickling through in the CEEMEA market, with Russian Promsvyazbank pricing a $300m seven year tier two transaction and Turkish Alternatifbank finishing off a $250m note. But benchmark bonds are on the way, with Ivory Coast and Macedonia opening books on dollar and euro deals respectively on Wednesday morning.

Turkey’s Alternatifbank opened books on a $250m five year bond on Tuesday. The starting spread offered what bankers away from the deal saw as a fair pick-up over Commercial Bank of Qatar, which is guaranteeing the notes.

Promsvyazbank’s tier two bond minimum size has been set at $200m and the deal is well oversubscribed, according to a syndicate official on the trade. Pricing is expected later on Tuesday.

Promsvyazbank is underlining that bond markets are open for Russian issuers, returning to the market with the tier two bond that it pulled in mid-March because of the Crimea crisis.