CEE monthly bond wrap: bond investors suffering April showers and still waiting for the flowers

CEE monthly bond wrap: bond investors suffering April showers and still waiting for the flowers
Central Europe issued a total of only 4 bonds worth collectively $1.9bn, which was less than half what was issued in April last year
By bne IntelliNews May 8, 2019

April was a poor month for bond issues in Central and Eastern Europe (CEE) as the two biggest markets – Russia and Turkey – were both suffering from political problems that depressed demand.

Central Europe issued a total of only four bonds worth collectively $1.9bn, which was less than half of the $5.8bn issued in the same month last year. In all the April crop of CE bonds was down by half or more compared to every year for the last three years.

However, year to date CE is still ahead of last year with a total of $20.7bn worth of issues over the first four months of this year compared to $19bn over the same period a year earlier. CE got off to a really good start to the year with issues worth between $5bn and $7bn each month for the first three months, before the market dried up in April.

Amongst the biggest issues was a €1bn sovereign issue by Slovakia that matures in 2030 and yields 0.75%. CPI Property Group also issued a €500mn bond that yields 4.875%.

The story was similar in Eastern Europe where a total of nine issues raised a total of $1.8bn that was significantly down on the $5.2bn that was raised in April a year earlier.

Year to date the picture was also poor with the 37 issues so far this year raising a total of $11.8bn against the $16.9bn that was raised in the first four months of last year from a total of 35 bonds.

As usual the biggest issues were from Russian companies which raised a total of $9.3bn from five issues, but that is well ahead of the mere $185mn that was raised last April, the month that the US released its punitive April 6 round of sanctions targeting some of Russia’s top businesses.

The shock of last year’s sanctions means that year to date Russia has raised almost the same amount as over the first four months of last year when companies issued a total of $9.4bn.

April was also down on a big month in March when a total of $6.2bn was issued, but half of that was due to a highly successful sovereign issue that raised $3bn and €750mn on the international markets.

Amongst the more interesting issues in April from Eastern Europe was a $500mn bond from the Development Bank of Belarus, a relatively new entity that has been tasked with modernising the Belarusian economy and has made some real inroads already.

 

CEE Top issues in Apr 2019

     

Issue

Currency

Volume (m.)

Lead Managers

Slovakia, 0.75% 9apr2030, EUR

EUR

1 000

Natixis, Societe Generale, Vseobecna uverova banka and others

CPI Property Group, 4.875% perp., EUR

EUR

550

Bank of China, Credit Suisse, Goldman Sachs and others

Zavarovalnica Triglav D.D., 4.5% 22oct2049, EUR

EUR

50

Erste Group

 

CIS Top issues in Apr 2019

     

Issue

Currency

Volume (m.)

Lead Managers

ALROSA, 4.65% 9apr2024, USD

USD

500

Gazprombank, JP Morgan, VTB Capital

STLC, 5.95% 17apr2025, USD

USD

500

Gazprombank, VTB Capital, Sovcombank, Renaissance Capital and others

Development Bank of Belarus, 6.75% 2may2024, USD

USD

500

Citigroup, RBI Group

Aragvi Holding International, 12% 9apr2024, USD

USD

300

Citigroup, UBS, VTB Capital, Renaissance Capital

 

Top issues in Apr 2019

     

Issue

Currency

Volume (m.)

Lead Managers

ALROSA, 4.65% 9apr2024, USD

USD

500

Gazprombank, JP Morgan, VTB Capital

STLC, 5.95% 17apr2025, USD

USD

500

Gazprombank, VTB Capital, Sovcombank, Renaissance Capital and others

BrokerCreditService, 6% 30jun2024, USD (41)

USD

10

BCS


 

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