CEE Bonds

Albaraka Turk, the Turkish banking unit of Bahrain-based Albaraka, defied doubters on Monday as it priced its debut sukuk at 7.75%, at the tight end of previous guidance. The $200m murabaha attracted as much as $400m of orders.

Albaraka Türk's sukuk debut remains on course, despite calls from investors for an illiquidity premium on the proposed deal.

Investors took advantage of Turkey's fast developing sukuk market this week by selling outstanding Kuveyt Türk notes and buying into a benchmark size debut from Türkiye Finans. The relative value play immediately paid off, as the new deal rallied one and a half points in the secondary market.

Peripheral eurozone sovereigns have had a flying start to 2013. But as the poorly received Italian general election and growing public rejection of austerity show, plenty of risks remain — and investors have yet to test the European Central Bank’s claim to do “whatever it takes” to save the currency bloc. Craig McGlashan reports.

Russian steel pipe company TMK and Turkish household appliances company Arçelik have released price guidance for new bonds, and both expect to price the deals later on Monday. Emirates NBD and Saudi Electricity Co also have price talk out for new issues (see separate stories).

Rating: Baa1/BBB/BBB

Emerging market bond volumes in 2012 are already approaching their 2011 levels in most regions with four months left of the year — and have already passed last year’s total by some way in the MENA region and Russia.

Over the last 18 months, more and more international corporates have discovered the attraction of the Swiss franc bond market, with many borrowers tapping the sector for the first time. High yield borrowers have found that they have access to the market, while last October German utility RWE became the first international corporate name to issue a hybrid capital transaction in Swiss francs. But does the market remain a niche funding pool, to be used only infrequently by borrowers to top up their borrowings in other currencies, or have Swiss francs become a core financing tool for international corporate borrowers? EuroWeek gathered together some of the leading dealers and borrowers to discuss the opportunities.

Georgian Oil and Gas Corp struck a deep well of demand this week despite difficult markets, pricing a $250m five year debut bond late on Wednesday at 7.125%.

Subsidiaries of Russian gas firm Gazprom announced the launch of a $500m-equivalent multicurrency revolving credit facility into syndication on Tuesday.

Emerging market deals such as the prospective debut bond from the Georgian Oil and Gas Corporation hit delays at the start of this week as political events in Europe over the weekend created tough market conditions for issuers.

Poland took the Swiss franc bond market by storm on Tuesday, pricing the largest international transaction in the currency since 2009 — a Sfr825m ($899.82m) double tranche note which was launched at just Sfr450m.