Central and Eastern Europe (CEE)

Russia launched its first international bond of the year on Thursday, which some have labelled as a show of strength by the sanction-hit country. Market participants are now debating which investors will end up buying the trade.

National Bank Trust, the bad bank set up by the Russian government after the financial crisis, has raised Rb50.2bn ($681m) by selling shares in VTB Bank, one of Russia’s largest banking groups.

Arçelik, the Turkish household appliance manufacturer that owns Beko and Grundig, is set to make its mark in the green bond market. The deal, some say, will be a test of investor appetite for Turkish corporate paper, which so far has been strong, despite the heightened volatility affecting the country in the first four months of the year.

Momentum is picking up among Russian borrowers seeking to raise green or ESG-linked loans. Sibur, the petrochemical company, is the latest borrower to enter the market, which bankers say is attracting companies from all over the spectrum.

Russia has mandated an exclusively Russian consortium of banks to arrange a euro bond issue. Market participants say the extra cash is not necessary but is Russia’s way of demonstrating its access to markets a month after its sovereign debt was slapped with further US sanctions.

PKN Orlen, the Polish oil refiner and petrol retailer, began marketing its debut green bond on Monday, a €500m no-grow seven year. Issuing a green bond would be a bold move for an oil company, but PKN Orlen is being conservative about the assets included and has obtained certification from the Climate Bonds Initiative.

A deal-hungry retail investor base provided crucial support for a strong first few months of the year in Russian equity capital markets, and sources in Moscow are hopeful that the momentum will carry on through 2021 as the political noise that threatened to derail the market subsides.

Pepco, the Polish discount retail group, has priced its IPO on the Warsaw Stock Exchange at Z40 a share, valuing the company at Z23.0bn (€5.1bn).

MAS Real Estate is the latest emerging markets issuer to have issued paper linked to environmental, social or governance factors. However, EM investors are demanding more ESG paper to match the levels seen in developed markets.

Turkish companies and banks are succeeding in raising funds in international debt markets, even as the country strays near the edge of an economic precipice and experienced investors view Turkish risk with disdain.

BCS Global Markets, the investment services division of Russia’s largest independent broker, has hired a new treasurer.

Emerging market portfolio managers say that their confidence in buying assets has been restored now that US Treasury yields have stopped racing upwards. But although they say they have cash to splash, some still believe valuations are toppy.