CEE Bonds
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The missed payment will not trigger cross-default but that may not be far off -
The expiry of Ofac's Russia debt payment licence means default is likely by the end of June
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Investors see little reason to play in primary
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But a busy holiday period means borrowers may have to wait until into June to test the market
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Investors expect most demand for Lithuania's issue to be from non-EM focused accounts
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Observers expect more issuers to roadshow then decide against bringing deals
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BGK continues CEE issuance but only investment grade names have tested the water in the past week
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More liquid Latvia to be used as pricing comparable for Lithuania
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A licence allowing Russia to pay foreign investors will likely expire at the end of the week
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BGK may have to offer higher new issue premium than Polish sovereign
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Borrowers must be ready to jump into picky primary markets as stigma of failure falls
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EM borrowers have little to lose by approaching investors. Cowering in the corner could have a higher price
