CEE Bonds

International Bank of Azerbaijan priced its first dollar benchmark on Wednesday evening. Progressive tightening during execution allowed the bookrunners hit their spread target and prompted some accounts to drop out. But the final book was big enough to ensure a successful bond that was stable around reoffer in the secondary market on Thursday morning.

Russia has taken its first step toward regaining access to international capital markets with a successful new issue for Alfa Bank’s holding company this week, writes Francesca Young.

International Bank of Azerbaijan (IBA) priced its first dollar benchmark this week, well inside the levels most investors had originally asked for.

Kazakhstan Temir Zholy (KTZ), the national rail company of Kazakhstan, is set to make its Swiss franc debut on Wednesday afternoon, selling a dual tranche deal. A lack of demand from institutional buyers is likely to limit the size of the deal, though the issuer could look to tap the deal quickly if interest in the grey market is strong enough.

ABH Financial, the holding company for Alfa Bank, has price guidance out for the first Russian primary market deal since Russian Railways in late February. The modest size and short tenor mean some debt bankers think it unlikely to reopen the Russian market more broadly, though the deal’s good reception with investors is helping to build positive sentiment towards Russian paper.

International Bank of Azerbaijan (IBA) is preparing to price a $500m five year bond this afternoon, having received almost $1bn in orders and narrowed price guidance to around 200bp over government bonds.

The CEEMEA market was back on form after a holiday induced slowdown last week. International Bank of Azerbaijan (IBA) and Russian ABH Financial are both aiming to price dollar bonds on Wednesday, while Morocco and Access Bank have added themselves to the African pipeline.

Central and Eastern Europe has benefited from a rally over the last few months, as funds have rotated out of Russia and into that region. But with tensions seemingly subsiding in eastern Ukraine and bankers eagerly expecting a return of Russian bond issues before the end of the year, the flows may start to reverse. The revival of Russian business could come at the expense of appetite for the CEE.

Renaissance Capital has hired Ahmed Badr as head of Middle East and North African equities and the chief executive of its new Dubai office the company announced on Tuesday.

PGE’s debut euro deal was trading up half a point in the secondary market on Tuesday morning, after the issuer priced its €500m no-grow note off an orderbook of over €4bn. The result bodes well for fellow Polish corporate PKN Orlen, which is planning its own inaugural deal. And investors eager for more fresh CEE supply have prospective debuts from Slovenian and Slovakian companies to look forward to.

Panamanian lender Global Bank is set to become the second financial from the country to tap the Swiss franc market on Tuesday, looking to appeal to Swiss retail investors with a juicy coupon for a modestly sized deal.

ABH Financial Limited has mandated Alfa Bank, Commerzbank and UBS to arrange a euro denominated Reg S senior unsecured bond, but bankers away from the note disagreed on whether the deal, which will be sub-benchmark size, will serve as a market reopener for Russian issuers.