CEE Bonds

Bankers expect a swathe of Russian corporate liability management trades to follow steel company Severstal releasing results of its tender offer on Wednesday evening.

Ukraine has mandated JP Morgan and Morgan Stanley to price a $1bn US government guaranteed bond, according to two DCM officials away from the deal.

Kazakhstan Temir Zholy (KTZ), the state rail company of Kazakhstan, mandated banks on Wednesday to arrange investor meetings in Switzerland and Kazakhstan ahead of a possible debut Swiss franc deal. No Kazakh issuer has ever sold Swiss franc denominated debt.

Montenegro’s new €280m five year bond was bid four cash points higher in the grey market on Wednesday morning as under allocated investors chased paper in the secondary market.

Ukraine is pricing a $1bn US government guaranteed bond via JP Morgan and Morgan Stanley, according to two DCM officials away from the deal.

China Construction Bank is set to launch a renminbi-denominated bond via its Frankfurt branch this week, according to two bankers close to the deal. It will be the first Frankfurt-issued CNH bond from a Chinese issuer, as Agricultural Bank of China's recent Frankfurt-listed deal was issued in Hong Kong as a dim sum deal.

Turkey dominates the sukuk scene in central and eastern Europe via the sovereign and participation banks. But the Czech Republic has emerged as another possible breeding ground for Islamic finance.

Montenegro is on track to print a euro deal of around €280m this afternoon, having received over €1.5bn in orders for its new bond. Around €200m is new money, with the remainder coming from borrowers switching out of the sovereign’s older deal as part of an accompanying liability management exercise.

Some banks big in the emerging markets this week laughed at GlobalCapital when we asked the question of whether any cuts had yet been made to their Russian bond teams. "It has only been two months since the start of the Crimea crisis!" they said, and this is, after all, the emerging markets, where volatility is par for the course. Many are cheerily optimistic that Russian bond business could return in the second half of this year. We disagree.

Montenegro has released price guidance for its new euro denominated five year bond at high 5%, which bankers away from the deal called "fair to generous". A minimum yield of 5.5% was set for the new issue last week.

Croatia has mandated Deutsche Bank, JP Morgan, Société Générale and Banca IMI to arrange a euro dominated bond.

It has been a two momentous weeks for the offshore renminbi market. There has been a torrent of deals, Frankfurt and Luxembourg have seen their debut RMB bond issues, and standby letters of credit (SBLCs) have been used for the first time in the asset class. Coming after another busy period in policymaking, when Paris gained an RQFII quota, and London and Frankfurt signed payments agreements with China, the momentum looks unstoppable.