CEE Bonds

Sberbank’s €1bn 5.5 year bond, priced on Monday, has provided the visible benchmark from a state-owned issuer needed to consider the Eurobond market unequivocally open for Russian borrowers, said bankers on and away from the deal.

Slovenia's Nova Ljubljanska banka is aiming to price a €300m three year bond this afternoon which would mark its first issue in the last five years. But buyers are divided between those focusing on the positives of Slovenian state support and the negatives of NLB's credit risk.

VAB Bank, the Ukrainian lender, is again asking investors to let it restructure its June 2014 Eurobond after they rejected its first offer at the start of the month. Analysts, though, said that there is no obvious need for a restructuring and that VAB's move has raised the risk that other Ukrainian issuers will try to take the same approach.

PKN Orlen’s debut €500m bond was holding at reoffer in the secondary market on Tuesday morning after the Polish oil refiner took €2.5bn in orders on Monday despite an aggressive spread, said bankers on the deal.

Albaraka Turk has priced $350m of five year sukuk at 6.25%, after drawing around $750m of orders. The Turkish participation bank previously indicated the deal would be benchmark size – typically $500m for international bonds, although sukuk arrangers sometimes use the term to describe smaller offerings.

Sberbank has released initial price thoughts in the mid-to high 200bp over mid-swaps area for a 5.5 year euro denominated bond, offering around a 10bp new issue premium at the tight end and 35bp at the wide according to an investor considering the deal. Tightening is expected before pricing later today. Books are over €1bn.

Oil and petrol company PKN Orlen opened books on the second Polish corporate debut of the year on Monday, and found its €500m no-grow bond five times subscribed when it tightened to final guidance of 160bp-165bp over mid-swaps.

Turkish participation bank Albaraka Turk (rated BB by Standard & Poor’s) has given initial price thoughts of low 6% area on a five year benchmark dollar sukuk.

Turkish conglomerate Doğuş Group looks set to become the first Turkish corporate borrower to issue a dollar sukuk, having applied to the country’s Capital Markets Board to issue up to $400m to foreign investors.

Turkish participation bank Albaraka Turk (rated BB by Standard & Poor’s) has given revised official guidance of 6.25% area on its five year benchmark sukuk, with pricing expected to follow on Tuesday.

The Turkish economy is beset by high inflation, sluggish GDP growth and a large current account deficit. Although the path ahead is daunting the country is showing strong signs of the necessary rebalancing. But the greatest threat to Turkey’s recovery is prematurely loose monetary policy, which is just what the central bank is under pressure to provide. Steven Gilmore reports.

Turkish banks are having a tough time. High interest rates, slow growth and a cheaper lira are all likely to persist, and credit expansion has slowed. But in the Eurobond market this competitive bunch of issuers are learning quickly how to make the most of the capital markets. Francesca Young reports.