CEE Bonds

Sovereign supply has dominated the CEEMEA market this week, with Latvia and Romania delivering landmark deals in euros and dollars respectively.

Poland’s deputy director of its public debt department, Bogdan Klimaszewski, has said the country could finish 50% of its financing for 2014 by the end of the month.

Serbia is planning to issue $600m in Eurobonds this year to help fill its €5.6bn funding target for 2014. Branko Drčelić, director of the public debt administration department at the Ministry of Finance said that the issue would likely be in dollars or euros, but the country is also considering sukuk, yen and rouble-denominated bonds for the future.

Romania became the first CEEMEA name to attempt a bond sale in dollars since the start of the year when it opened books on Tuesday on a dual tranche benchmark issue.

Slovakia drew a hefty book for its new January 2029s on Thursday, picking up roughly €4bn of orders in just 2.5 hours and tightening pricing by 10bp from initial price thoughts.

Albaraka Turk plans to issue $300m to $400m of sukuk this year – up to twice the amount it previously indicated.

Ukraine plans to sell $15bn in sovereign debt to Russia, and the first sale could come before the end of this week. The news sent Ukrainian sovereign spreads plummeting and should reduce the chance of a default in 2014, said analysts. But it did little to alter to the sovereign’s long term prospects, or those of other Ukrainian credits, said debt bankers.

Predicting volume for sukuk can be more difficult than for emerging market bonds, given the sukuk market is still in a nascent stage and many issuers are coming to the asset class for the first time. It is widely expected, however, that dollar sukuk issuance will surpass this year’s figure in 2014.

The United Kingdom is right to lean on Turkey for advice in placing its inaugural sukuk issue. Turkey’s experience in tapping the Islamic market was hard won and is valuable to new sovereign issuers. But the UK should prepare to pay the favour forward even if keeping its own counsel might allow it to command tighter pricing by keeping sovereign sukuk supply scarce.

Market conditions remained favourable for CEEMEA issuance on Monday following Friday’s strong US non-farm payrolls number but potential deals were thin on the ground, bankers said.

UniCredit Bank Czech Republic and Slovakia has issued the first benchmark-sized euro covered bond backed by Czech mortgages. The €800m five year hypoteční zástavní listy transaction was preplaced in the local market with a diversified group of investors.

Global co-ordinator, Deutsche Bank opened books on Uranium One’s dollar debut on Wednesday following the conclusion of a six-day global roadshow.