Central and Eastern Europe (CEE)

Norilsk Nickel

The Republic of Lithuania on Friday threw out the first fresh mandate after a monster week for CEEMEA supply, and is looking at a long dated euro deal.

In this round-up, Hong Kong RMB clearing dropped in September, Macau's RMB deposits and cross-border settlement also fell in July, South Korea's RMB deposits kept contracting in September, and Bank of China Budapest branch formally launched RMB clearing services.

It was just like the good old days in emerging market bonds this week despite the IMF's best attempts to spread doom and gloom. Riding the crest of a wave of supply though were the first Russian corporate deals longer than a year since 2013 — and how investors dived in. Francesca Young reports.

Beset by dire predictions and gloomy warnings from all sides as to the future of emerging markets, CEEMEA borrowers decided to ignore the melodrama and produce the second biggest week for issuance of the entire year.

Banks on Tuesday settled credit default swaps referencing the Republic of Ukraine at 80.625, the highest recovery on a sovereign credit event auction since they began in 2005.

Eastern Europe is generally viewed by credit investors as one of the safer segments of the increasingly shaky emerging markets asset class. But the aggressive presence of Russia poses risks, as its neighbours know all too well.

Hrvatska Elektroprivreda (Hep) picked banks for a dollar bond and kicked off an exchange offer on its 2017 notes on Wednesday.

Gazprom has ratcheted in price guidance for its euro denominated benchmark, as it looks to print the second Russian corporate bond this week after a drought that started in November 2014.

The Republic of Poland printed an impressive €1.75bn six year bond on Wednesday with a skinny new issue premium, adding to the pile of successful CEEMEA bonds printed this week.

Poland has released price guidance for a six year euro benchmark at a level which bankers away from the deal said offers a reasonable new issue premium.

Norilsk Nickel restarted CEEMEA supply and proved investors are willing to buy Russian risk in large size and longer tenors with a $1bn seven year note on Tuesday, which drew praise even from rival debt bankers.