CEE Bonds

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.

It is a fine testament to the growing stature of Islamic finance that various novel borrowers are pressing ahead to issue international sukuk for the first time — the likes of Hong Kong, Luxembourg and Dogus Group among them. But with so many debuts revving up to join an autumnal convoy, those that can beat the traffic are advised to do so.

Turkish Alternatifbank has mandated Bank of America Merrill Lynch and Commerzbank to arrange a Commercial Bank of Qatar-guaranteed dollar bond. CBQ, rated A1/A-/A owns 74.25% of Alternatifbank, which has a long term issuer default rating of BBB from Fitch.

Year to date CEEMEA sovereign bond volumes are at their highest level ever, with the total sold so far already soaring past some analysts’ full year predictions. Issuance is less than $20bn off the record set in 2012, and with Macedonia and Bahrain adding themselves to the list of CEE and African sovereign deals still expected, 2014 could easily become the new benchmark for sovereign supply, said analysts.

The Republic of Macedonia has picked banks for its third ever bond deal and starts investor meetings next week.

Czech corporate Net4Gas has picked bookrunners for a debut euro deal and starts investor meetings next week. Bankers expect the CEE corporate market to keep them busy in the coming months.

Credit Suisse returned to the Australian dollar market after a four year absence on Thursday, selling a benchmark deal through its Sydney subsidiary. Strong investor appetite, particularly for a fixed rate tranche, allowed the bank to sell its largest ever trade in the currency.

Year to date CEEMEA sovereign bond volumes are at their highest ever, with the total sold so far already soaring past some analysts’ full year predictions. Issuance is less than $20bn off the record set in 2012, and with several CEE and African sovereign deals, including from Turkey, still expected 2014 could easily become the new benchmark for sovereign supply, said analysts.