CEE Bonds

Gazprombank has picked bookrunners for its first public euro deal and will begin its roadshow on Monday. A five year benchmark bond is likely to follow, and though diversification is the main motivation the borrower could end up beating the levels available in the dollar market, said bankers on the deal.

Norilsk Nickel is aiming to price its second dollar deal of the year on Friday and by Thursday afternoon had already attracted twice the orders it received on its last transaction.

Czech investors’ desire to diversify their holdings away from domestic credits is opening up new opportunities for foreign issuers, with some international borrowers opting to print private placements denominated in Czech koruna and others selling directly into the Czech market.

Bank St Petersburg (BSP) sold its first Basel III-compliant tier two bond this week. The borrower was unable to tighten pricing and had to settle for a smaller print than it originally hoped for but it had started execution at an ambitious level and was far more focused on spread than size, said bankers on the deal.

Promsyazbank chief executive Artem Konstandian has told EuroWeek that he considers the pricing available for Russian bank subordinated debt to be unattractive based on the levels that recent tier two deals have achieved.

OTP Mortgage Bank opened books on a €500m floating rate covered bond on Thursday morning, and set guidance on the mortgage backed bond at 190bp over three month Euribor.

VTB Bank took advantage of Czech investors’ hunger for diversification this week to become the first Russian credit to print in Czech koruna. The issuer joins a series of other emerging market names to debut in the currency this year.

Gazprom returned to the Swiss franc market for the first time in four years on Wednesday. Its second ever bond in the currency drew strong demand helped by rarity value and a decent premium over compatriot Russian Railways, according to bankers away from the deal.

Bank St Petersburg is planning to print a smaller than hoped for $100m-$200m tier two bond this afternoon with pricing unlikely to change from guidance — a result that mirrors the outcome for its last subordinated deal exactly a year ago.

Bank St Petersburg (BSP) opened books on its first tier two Basel III-compliant bond on Monday. The transaction follows difficult tier two deals from peers Russian Agricultural Bank and Home Credit and Finance Bank last week. But borrowers have ample incentive to push on with capital raising despite an uncertain market, said debt bankers.

Rating: Issue unrated

Pension fund reform in Poland could support local investor demand for corporate bonds, said analysts, but some issuers have preferred to sell bonds in foreign markets as the benefits from the changes are weighed.