CEE Bonds

Gazprombank is still taking orders for its first Basel III compliant subordinated bond and has drawn in around $2bn so far, according to bankers away from the deal.

Armenia priced its debut Eurobond late last week from a book of $2.7bn and at a price that bankers away from the deal said offered investors good value. But despite a solid first day's trading on Friday, the bond slumped below re-offer in the secondary market on Monday.

Turkey has seized upon improving markets to push ahead with plans to issue a second dollar benchmark sukuk. The sovereign has picked banks and lined up roadshows next week in the Middle East and Asia.

Gazprom priced a £500m sterling bond on Wednesday and paid up only slightly compared to where it could have printed in dollars. A surge of demand surprised the leads, who shaved 50bp off pricing during execution and still ended up with almost 10 times the necessary demand. But bankers away from the deal said the steep spread revision pointed to sloppy execution.

Hungary has filed a registration statement with the SEC to issue up to $5bn in debt securities, and analysts are expecting the sovereign to take advantage of the chunky new programme before the end of the year.

Emerging market bond supply had an explosive end to the week thanks to the US Federal Reserve, which lit the fuse by delaying a reduction of its quantitative easing policy, to the surprise of many market participants. The move unleashed a surge of bond issuance across CEEMEA and Latin America, which bankers expect to be just the start of a race to take advantage of reduced funding costs, write Francesca Young and Steven Gilmore.

Armenia opened books on its first Eurobond on Thursday morning and set initial price thoughts at 6.375% area for a seven year bond, which offers fair value relative to Serbia and neighbouring Georgia, said analysts.

Gazprom priced a £500m sterling bond on Wednesday and paid up only slightly compared to where it could have printed in dollars. A surge of demand surprised the leads, who shaved 50bp off pricing during execution and still ended up with almost 10 times the necessary demand. But bankers away from the deal said the steep spread revision pointed to sloppy execution.

Hungary has filed a registration statement with the SEC to issue up to $5bn in debt securities, and analysts are expecting the sovereign to take advantage of the chunky new programme before the end of the year.

Gazprom broke the CEEMEA bond market silence with a seven year sterling deal on Wednesday. It had the market to itself as other issuers waited for the Federal Open Market Committee meeting in the US to end before bringing deals.

CEEMEA issuers poised for dollar deals are eagerly awaiting the outcome of the Federal Open Market Committee meeting before taking advantage of a stronger appetite for EM debt. But Gazprom saw a clear window for its sterling bond, and with no reason to wait, it opened books on Wednesday morning for a seven year bond.

The CEEMEA market had a strong opening on Monday morning, with buyers a clear majority in the secondary market and last week’s primary transactions performing well. But borrowers are still opting to hold off until after the Federal Open Market Committee meeting on Wednesday.