Central and Eastern Europe (CEE)

Middle East issuers are expected in the bond market in droves, with Egypt and Mashreqbank leading the charge this week.

Covered bonds offer a way for Baltic banks to develop a new seam of long-term standalone wholesale funding. But a successful conclusion to this project will depend on whether investors are convinced there is an effective mechanism for cross-border recognition of assets.

Parliamentary approval of Estonian covered bond legislation opens the way for Luminor Bank to make the first steps towards establishing a pan-Baltic covered bond market, according to the bank’s head of treasury, Max Ehrengren.

The Estonian Financial Services Authority this week ordered Danske Bank to leave the country. The Danish lender replied that it would exit the Baltics and Russia as a whole. Meanwhile, the Estonian regulator and its Danish counterpart are under investigation for a possible breach of European Union law in relation to Danske’s money laundering scandal.

Russia may be back in the debt market again as soon as March, according to rumours among emerging markets syndicate bankers. However, the sovereign’s reception in the market is uncertain because of a renewed push for further sanctions in the US senate.

Russian equity capital markets issuance is likely to return soon, potentially in the first quarter, as issuers and bankers in the country prepare to sell stakes in publicly listed Russian companies through accelerated bookbuilds.

Rating: Ba3/B+/BB

Rating: A3/A/A-

Credit Bank of Moscow printed a €500m five year bond on Tuesday, taking advantage of positive sentiment towards Russian bonds that existed early in the week before new talk of fresh US sanctions on Russia later dented enthusiasm for the country’s credit.

Vakifbank has found competitive funding with a privately placed covered bond, its second of the year, sold via sole lead manager Credit Suisse, even though the publicly syndicated Turkish covered bond market has been closed for some time.

The Turkish sovereign’s third bond of the year, a sukuk, was priced with no new issue premium on Wednesday, paving the way for Türk Telekom to come to market.

The Republic of Turkey has tightened price guidance for its three year sukuk to 5.9% area, with books for the deal in excess of $3.5bn.