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bne November 2017 New Europe in Numbers I 57
Bonds back with a bounce
bne IntelliNews
Bond issues were back after the summer hiatus with a bumper crop of issues in September totalling $5.7bn in Central and Eastern Europe (CEE) and another whopping $13bn in the Commonwealth of Independent States (CIS).
The CEE issues for September of $5.7bn were above average for the year, but more money was issued in March ($10.6bn) and May ($8.1bn). However, that $5.7bn issued in September was still well a head of the $3.2bn issued
in the same month a year earlier.
All the biggest issuers placed bonds for $500mn led by the Export Credit Bank of Turkey (5 year bond with a yield of 4.25%), the Turkish branch of Coca- Cola (seven year, 4.215%), the Turkish bank Ziraat Bank (six year, 5.125%), and the Polish mortgage bank PKO Bank Hipoteczny (seven years, 0.75%).
However, the main action was in
the CIS with the debut Tajik 10-year $500mn bond with a yield of 7.125% that was heavily oversubscribed. Yield hungry investors have been snapping up these exotic bonds banking on a general economic revival in Eastern Europe and Central Asia. Ukraine also got a huge $3bn 15-year bond away, the first for the government
of the post-EuroMaidan demonstra- tions, with a coupon of 7.357% that has greatly reduced the influence
the IMF will have on the govern- ment and its reform programme.
The majority of the other issues
were Russian companies including steel mill Novolipetsk Meatllurgical Kombinat (NLMK), petrochemical plant Sibur as well as the Kazakh gas pipeline operator that got bonds worth $500mn, $500mn and $750mn away.
CEE: new bond issues $mn
CIS: Volume of new issues, $mn
Russia: Volume of new issues, $mn
Source: CBonds
Finally International Investment Bank (IIB), the Soviet-era development bank for the COMICON counties also tapped the market for €60mn with
a coupon of 1.593% that reflects
its status as one of the regional International Financial Institutions (IFI).
All-in-all September was an excel- lent month of bond issues which are
running well ahead of last year: in the CIS the total volume of issues is over three times more than the same month last year, driven up by the two large sovereign issues, al- though in Russia the bond issues were about half those of last year.
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