CEE Bonds

The appointment of new clearing banks in Paris, Frankfurt and Seoul, as well as the promised expansion of two way cash sweeping to all foreign corporates in China, should help boost non-Chinese offshore RMB issuance, analysts reckon.

Russian steel company NLMK Group announced a tender offer on its 2018 and 2019 dollar bonds, and is planning to buy back up to $100m across the two notes.

Fresh mandates are helping raise hopes of an increase in the hitherto meagre volumes of primary CEEMEA issuance. But that market’s pipeline is being dwarfed by an approaching wave of Latin American transactions as the region refuses to let the Fifa World Cup get in the way of deal flow.

Bondholders have approved Ukrainian financial VAB Bank’s second attempt at another restructuring of its June 2014 Eurobonds. The agreement helps the bank preserve liquidity at a time when many Ukrainian institutions are under pressure, but analysts are not ruling out the possibility that the issuer could return for a third restructuring in the future.

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

VTB Bank on Thursday became the first Russian issuer to issue in the Swiss franc market since Russia’s annexation of Crimea earlier this year, shrugging off the worries of some syndicate bankers to increase the size of the subordinated bond while pricing competitively to Gazprombank’s own Swiss franc tier two.

Garanti Bank sold a €500m five year bond on Tuesday in line with initial price thoughts — an unusual event in CEEMEA where pricing is typically tightened. But a syndicate official on the note said he was pleased with the result, and one away from the deal said Garanti’s generosity may have been necessary after a string of Turkish bank deals in the last month.

Fined a record $8.9bn by the US Justice Department for evading sanctions on Sudan, Cuba and Iran and hit by a dollar trading ban on parts of oil and gas business that starts next year, it’s safe to say BNP Paribas has had better weeks. Quite how the heavy punishment will affect BNPP’s ambitions and operations in the US remains to be seen. However, the French bank remains determined to continue the development of its emerging markets business, including its successful CEEMEA franchise. GlobalCapital’s Francesca Young speaks to Nick Darrant, head of CEEMEA syndicate, Giulio Baratta, head of CEEMEA DCM and Alexis Taffin de Tilques, managing director, head of CEE, near-East and Africa DCM about how the bank wins business in the region.

Bulgarian government bonds, including its recent Eurobond, this week shrugged off a mini banking crisis that last week spread through a seemingly malicious email and social media campaign. An emergency credit line for the banking sector from the sovereign helped end the panic.

VTB Bank is set to become the second Russian issuer to tap the Swiss franc market this year, selling a tier two bond on Thursday. The deal is receiving a positive response from investors, according to bankers involved, despite some concerns about the geopolitical situation in Eastern Europe following Russia’s annexation of Crimea.

Overall CEEMEA supply this year may be down almost $25bn on the same time in 2013, but second quarter issuance was only slightly shy of the total sold over the same period last year. The healthy pick-up in issuance allowed some bookrunners — including Deutsche and HSBC — to redress a sluggish start to the year but the top trio of Citi, JP Morgan and Barclays remained in place.

Garanti Bank sold a €500m five year bond on Tuesday in line with initial price thoughts — an unusual event in CEEMEA where pricing is typically tightened. But a syndicate official on the note said he was pleased with the result, and one away from the deal said Garanti’s generosity may have been necessary after a string of Turkish bank deals in the last month.