Russia
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NLMK Group, one of Russia’s largest steel manufacturers, is planning a return to the bond market after a two year hiatus. -
While some emerging market loans bankers have noted an uptick of activity since a painfully slow January, those covering Russia are still patiently awaiting news of concrete transactions. But an imbalance between supply and demand has put international lenders in an awkward position, forcing them to rethink their strategies.
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The Russian sovereign is expected to come to market for a Eurobond, perhaps as early as March, but some investors are concerned that the strained diplomatic relations between Russia and the West make its paper too dangerous to invest in.
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Russian fertiliser producer EuroChem has mandated banks for a tender offer and new issue — the first from a Russian company that is not owned by the state in a year.
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Middle East issuers are expected in the bond market in droves, with Egypt and Mashreqbank leading the charge this week.
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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.
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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.
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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.
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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.
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Credit Bank of Moscow has tightened price guidance for its euro five year bond, with books in excess of €800m for the Reg S/144A note — an unusual format for a euro deal, but one designed to provide a fall back option of switching to dollars if pricing for the bank’s inaugural euro bond was deemed unfavourable after feedback.
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Russian president Vladimir Putin’s suggestion that he will extend the country’s capital amnesty by a year is good news for the country’s capital markets and a step forward in making the country less dependent on international, and primarily western, investors.
