Page 58 - RUSRptAug18

bailouts of Russia's largest private banks, billions worth of subordinated debt were wiped off . Now the CBR argues that unqualified investors should be protected from operations with high-risk instruments such as subordinated bonds. Currently both qualified and non-qualified investors can acquire subordinated bonds. CBR officials previously argued that subordinated instruments should be limited to shareholders of the issuer and kept away from the public.
Bond markets in emerging Europe came to a virtual standstill in June as politics killed off almost all interest in issuing fresh paper: Turkey was holding crucial presidential elections where the outcome was far from clear (Turkish president Recep Tayyip Erdogan won), and Russia has been knocked off its feetbythe A pril6roundofUSsanctions .
A total of six new bonds were issued in Central and Southeast Europe worth a total of $3.29bn, which is well down on the $16.4bn that was issued over the first six months of last year.
There were no bond issues at all from the Commonwealth of Independent States (CIS) other than two tiny bonds from Russia worth a total of $180mn. That represents a total collapse of interest in bond issues compared to the $7.2bn issued in the CIS in the same month a year ago, including $5.9bn from Russia, according to the information provided by CBonds .
The market was already well down y/y as bne reported last month, as the sanctions and the looming elections took their toll, but even in May the CIS still managed to issue a total of $540mn of bonds, while the CESE region issued about the same amount as this month.
Amongst the CESE issues were two sovereign deals: Romania issued $1.2bn that matures in 2048 at 5.125% and Croatia issued €750mn that matures in 2028 at 2.7%.
There was one significant corporate issue too: the state-owned Bulgarian Energy Holding (BEH) that i ssued €400mn bond that matures in 2025 at 3.5%.
CEE - Top issues in June 2018
Issue
Currency
Volume (m.)
Lead Managers
Bulgarian Energy Holding, 3.5% 28jun2025, EUR
EUR
400
Citi
Croatia, 2.7% 15jun2028, EUR
EUR
750
Deutsche Bank, J
Romania, 5.125% 15jun2048, USD
USD
1 200
Citi, Deutsche Ba Morgan, UniCredi
58 RUSSIA Country Report August 2018 www.intellinews.com