The new US sanctions imposed on Russia on April 6 took their toll on bond issues in the month. The total issued crashed to a paltry $180mn. Only two banks managed to get three bonds away.

Russian investment bank Renaissance Capital issued a $6.2mn short-term bond that matures at the end of this year. Although RenCap was founded by foreigners in Russia, these days it has at least as much business in Africa and its owner Mikhail Prokhorov has so far escaped the Specially Designated Nationals And Blocked Persons List (SDN List). Up-and-coming broker/dealer BSC Global Markets was back in the market with a larger $150mn issue that matures in 2028, according to Cbond’s data, and has been a regular issuer this year.

In March Russia defied western pressure that was building in connection with the scandal that followed the poisoning of former spy Sergei Skripal. It managed several large bond issues. While the US Treasury Department (USTD) has specifically said on two occasions this year that Russian sovereign bond issues will not be targeted by sanctions as that would cause problems on the capital markets for everyone, the threat of sanctions has again made all Russian assets toxic, thus the number of issues has dropped like a stone.

The total $180mn raised with issues in April was a fraction of the $4.8bn raised the same month a year earlier, and the total of $9.4bn raised YTD this year is also now down compared with the $11.9bn that was raised in the first four months of last year by Russia.

Bond issues from the rest of the Commonwealth of Independent States (CIS) brought more action. Companies from the rest of the region raised $5.2bn with 11 issues, down on the same month a year earlier when they raised $8.1bn with 13 issues. YTD companies in the CIS (including Russia) have raised a total of $16.4bn, slightly down on the $17.9bn raised last year thanks to Russia’s poor showing in April.

The main players in the CIS were Kazakhstan’s energy company KazMunayGaz and Ukraine’s metallurgical company Metinvest, which issued a total of $4.6bn in bonds.

Issuers were a lot more active in Central Europe where a total of 11 bonds were issued worth a collective $5.8bn, up on the same month a year ago with $3.5bn by 5 issuers. However, YTD that left the CEE region down year-on-year with a total of $19bn issued so far this year compared to $20.9bn issued by this time last year.

The biggest issue in CEE was a $2bn sovereign bond from the government of Turkey, which matures in 2028. So far this year, Turkey has raised a total of $4bn from international markets while it plans $6.5bn worth of Eurobond issues in all across 2018.

Its sovereign bond was joined by $500mn from the Export Credit Bank of Turkey that matures in 2024. Turkish telecoms company Turkcell also issued a 10-year $500mn bond as did EP Infrastructure, a gas transport company working in Central Europe, which issued a €750mn bond that matures in 2024. The other big bond of the month was a sovereign issue by Montenegro with a 7-year €500mn bond on April 12 at a favourable interest rate of 3.375%, the finance ministry said.

The new Eurobond is aimed at refinancing previous bond issues with a total amount of €362mn. The issues are due to be paid in 2019, 2020 and 2021.

Montenegrin Finance Minister Darko Radunovic said that foreign investors positively evaluated the activities of the finance ministry and the government following positive reviews put out by the International Monetary Fund (IMF) and the World Bank, as well as positive ratings from rating agencies. The demand for the issue totalled €1.482bn, almost three times more than the sold issue, the finance ministry said.

CEE - Top issues in April 2018
Issue	Currency	Volume (m.)	Lead Managers
Turkcell Iletisim, 5.8% 11apr2028, USD	USD	500	BNP Paribas, HSBC, JP Morgan
Montenegro, 3.375% 21apr2025, EUR	EUR	500	Deutsche Bank, Erste Group, Societe Generale
Export Credit Bank of Turkey, 6.125% 3may2024, USD	USD	500	Citi, ING, Standard Chartered Bank and others
EP Infrastructure, 1.659% 26apr2024, EUR	EUR	750	Banca IMI, BoC, Citi, Erste Group, ING, SMBC Nikko Capital, UniCredit and others
Turkey, 6.125% 24oct2028, USD	USD	2000	Goldman Sachs, HSBC, JP Morgan

CIS - Top issues in April 2018
Issue	Currency	Volume (m.)	Lead Managers
KazMunayGas, 4.75% 24apr2025, USD	USD	500	Citi, Halyk Finance, JP Morgan, Mitsubishi UFJ FG, UBS
Metinvest, 8.5% 23apr2026, USD	USD	525	Deutsche Bank, ING, Natixis, UniCredit
Metinvest, 7.75% 23apr2023, USD	USD	825	Deutsche Bank, ING, Natixis, UniCredit
KazMunayGas, 5.375% 24apr2030, USD	USD	1250	Citigroup, Halyk Finance, JP Morgan, Mitsubishi UFJ FG, UBS
KazMunayGas, 6.375% 24oct2048, USD	USD	1500	Citigroup, Halyk Finance, JP Morgan, Mitsubishi UFJ FG, UBS

RUSSIA - Top issues in April 2018
Issue	Currency	Volume (m.)	Lead Managers
Renaissance Financial Holdings Limited, 0% 21dec2018, USD (235D)	USD	6,2	Renaissance Capital
BCS, 0% 11apr2028, USD (3653D)	USD	150	BCS