Page 57 - bne_Magazine_October_2017

bne October 2017 New Europe in Numbers I 57
CEE monthly bond wrap: summer slowdown is here
bne IntelliNews
Everyone was on holiday in August it seems. There were no bond issues at all in Central and Eastern Europe (CEE) and only three small issues in Russia.
That makes this August even qui- eter than last year, when there were two bond issues worth $1.565bn
in CEE, one bond in the CIS worth $1bn and no bonds at all in Rus- sia, according to CBonds.
All the action was the three bonds is- sued by BCS Global Markets, a young and fast growing brokerage/investment bank focusing on Eastern Europe.
BCS issued three bonds: a $9.5mn bond that matures in 2022 with a 5.5% yield and two ruble bonds that mature in 2020 and 2027 respectively. BCS was also responsible for two of the four bonds that were issued the previous month when it raised $14.5mn.
However, bond issues will pick up sharply in September. CEE issued $3.2bn in September 2016, the CIS is- sued $4.2bn and Russia issued $3.2bn.
Bond investors’ appetite for more exotic offerings is high at the mo- ment. Tajikistan, tapped into growing investor interest in sovereign debt on September 8 with a $500mn issue
that yielded 7.1% and was massively oversubscribed. That follow a success- ful $1.4bn Belarusian issue in June with a $800mn five-year tranche with a yield of 7.125% and $600mn ten- year tranche with a yield of 7.625%.
“The benchmark spread on the 5-year international [Belarusian] USD bonds offered back in June tightened by some 100bp since then (from 467bp to some 350bp, yields down from around 6.4% to 5.2%), the spread compression on
Russia: Volume of new issues, $mn
CEE: new bond issues $mn
CIS: Volume of new issues, $mn
Source: CBonds
the longdated bonds amounts to some 100bp as well (down from some 500bp to below 400bp, yields down from well above 7% to close to 6%),” RZB ana- lyst Gunter Deuber said in a note.
And Ukraine got a $3bn Eurobond away to high demand in Septem- ber – its first post- Maidan Eurobond issue. According to the government the issue will be used to refinance
some of the debt that was restructured and push the maturity dates out as Ukraine’s repayment of the restruc- tured bonds was due to start next year.
The Ukrainian Ministry of Finance clearly wants to make use of the current positive environment to refinance debt that was restructured by the former Finance Minister while it is still cheap.
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