Middle East

Confidence is sweeping through the CEEMEA bond market as huge volumes for some of 2018’s most maligned issuers have pushed volumes up to record breaking levels for the first fortnight of a year. But despite the strong start, some bankers are concerned that the difficulties of last year are a whisker away from making a comeback. Francesca Young, Lewis McLellan and Sam Kerr report.

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Emerging markets got off to a cracking start for the year this week with a slew of sovereign deals hitting screens. High quality, low beta sovereigns Israel and Slovenia began proceedings with impressive euro deals.

Turkey made its first capital markets foray of the year with a $2bn bond issue on Wednesday. But bankers were divided on the deal's success.

Saudi Arabia's $7.5bn bond, issued on Wednesday, met with little resistance from investors, despite international condemnation of the killing of Jamal Khashoggi at the country's consulate in Istanbul last year. The lead managers built a $27bn book for the deal.

Israel rounded out an immensely successful opening week of 2019 for emerging market sovereign bond issues with its largest deal ever. The borrower raised €2.5bn of 10 and 30 year debt, pushing out its curve and printing at its tightest ever spread for a euro deal.

Yapi Kredi sold the first ever public additional tier one (AT1) bond from Turkey on Wednesday, which leads said would act as a benchmark for future issuers from the country despite the deal having been largely sold to the borrower’s shareholders.

Turkey has come to market for a 10 year dollar benchmark, reasserting its status as one of emerging market bonds' most frequent borrowers after a turbulent 2018.

BNP Paribas has filled the gap it had in Middle East DCM with an internal move of a banker working in sustainable capital markets.

Saudi Arabia is expected to print large tranches for its new 2029 and 2050 bond issue but will need to pay up for them in its first deal since the killing of journalist Jamal Khashoggi at the country's consulate in Istanbul last year.

Israel hit the market on Wednesday with a dual tranche euro deal, looking to test demand at the long end of the yield curve. The country’s reputation as a quality issuer appears to have carried it through.

Yapi Kredi, the Turkish bank, has set the pricing for its additional tier one bond though eschewing a “traditional bookbuild process”.