October was a disappointing month for bond issues as the volumes dropped off sharply from a stellar September in the Commonwealth of Independent States (CIS), while the volumes in Central and Eastern Europe (CEE) held their own. Bond issues in both regions were well down on the same month a year earlier.

CEE was the most active market and saw a total of 10 issues worth $5.8bn, which was just a little more than the month previously. However, this was significantly less than the 15 issues a year earlier that raised $7.8bn.

The biggest issue in CEE was a Hungarian sovereign 10-year Eurobond worth €1bn with a yield of 1.75%. Other big issues were from Tüpraş, Turkey’s only oil refiner, operating four refineries with a total capacity to handle an annual 28.1mn tons of crude, which issued a $700mn seven-year bond with a yield of 4.5%.  

The Polish state-owned Bank Gospodarstwa Krajowego also issued a €750mn 11-year Eurobond with a yield of 1.625% that will be used to fund its various economic-boosting projects.

And the Czech real estate developer RESIDOMO issued a €680mn seven-year bond with a yield of 3.375% to fund developments in the booming Czech real estate market.

In the CIS a mere $876mn was raise by five issues, of which two were Russian. That is well down on the whopping $13.1bn raised in the CIS a month earlier, half of which was raised by Russian companies. It is also well down on October 2016 when CIS companies raised a total of $3.2bn.

This poor showing is the first month this year when less was raised with bond issues than last year and may suggest that the enthusiasm for exotic eastern European bond issues is starting to flag.

In Eastern Europe almost all the running was made by ABH Holdings S.A. which is part of Russia’s Alfa Group owned by oligarch Mikhail Fridman and mostly invests into other banking groups in the CIS and Europe. Its Ukrainian branch issued two bonds of $50mn year with almost the same three year maturity and the Russian subsidiary ABH Financial Ltd another CHF150 bond with a five-year maturity.

The biggest bond was issued by the state-owned Russian Railways (RZD) a RUB15bn ($254mn) seven-year bond with a yield of 7.9%.

But maybe the most interesting was Belarus debut corporate bond from leading retailer Eurotorg (aka Euroopt), which raised $350mn with a five-year bond yielding 8.75%. The company is arguably one of the best run and fastest growing companies in the country, but investors remain cautious of Belarusian assets given the lack of political freedom and the backward nature of the economy. However, yield hungry bond traders are hungry enough still to invest in these most exotic bonds still.