Page 47 - BNE_magazine_bne_September 2019

bne September 2019
to just €1.3bn of debt expiring this year, while the EE-7 (Azerbaijan, Belarus, Kazakhstan, Russia, Tajikistan, Ukraine and Uzbekistan) raised almost $9bn, several times the $2.2bn of debt matur- ing during the year.
According to Raiffeisen analysts, the remaining bond redemptions for Central and Eastern Europe this year are quite low at just €7.3bn, though analysts see
over the expiring debt,” the report says.
“In particular, CE/SEE countries may also opt for partial pre-funding of their 2020 refinancing needs already in Q4 2019 as the lower cost of funding in developed markets and relatively strong fundamentals and higher rating profile of the majority of CEE should support good investment case for
CEE Eurobonds.”
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“In 2020 the maturing debt will jump to €18.7bn and the redemption schedule will remain relatively tough”
more issuance potentially from Russia, Romania, Croatia, Ukraine and possibly Poland.
After a very quiet year for bond issues in 2018 the bond market has been active this year as sentiment improves and investors go “risk-on” again, as bne IntelliNews reported in its CEE monthly bond market wrap recently.
However, in 2020, “the maturing debt will jump to €18.7bn and the redemp- tion schedule will remain relatively tough with overall €17.6bn in 2021 too ...Overall in CEE the larger redemptions in 2020 speak in favour of issuing more new Eurobonds to help sovereigns roll-
Central European sovereign placements on the Eurobond market are already at almost 80% of the total in 2018 in 2019 YTD, while sovereigns in Southeast and Eastern Europe have also actively turned to the Eurobond market.
However, Raiffeisen points to changes in the policy mix: “In Poland government targets a reduction of foreign debt share in its total public liabilities down to 24% by 2022 from current 28%, Hungary targets running down foreign debt share down to 10% of the total by 2021. Czech government has chosen to issue domes- tic euro-denominated securities instead of Eurobonds for refinancing maturing foreign debt.”
Eurobond redemption in Central, Eastern and Southeast Europe
25 20 15 10
5 0
2019 2020
2021 2022
2023
2024 2025 2026
SEE EE
2027 2028 2029
*EUR bn equivalent all redemptions restated into EUR at 1.12USD
Source: Bloomberg, Raiffeisen Research
CE
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