Central and Southeast Europe were actively issuing bonds in November, whereas the bond markets further east were subdued, according to the latest data from CBonds.

Seven issuers in Central Europe issued a total of $5.3bn worth bonds that was more than double the total issued in the same month a year earlier and by far the most issued in a November over the last three years.

That brings the total value of bonds issued YTD in Central Europe up to $44.5bn, ahead of the $38.9bn issued in the first eleven months of the year in 2018 but behind the $49.8bn that was issued in 2017 – a vintage year for bond issues.

Top CEE issues in Nov 2019
Issue	Currency	Volume (m.)	Lead Managers
Turkey, 5.6% 14nov2024, USD	USD	2 500	HSBC, Goldman Sachs, JP Morgan
CEZ, 0.875% 2dec2026, EUR	EUR	750	Barclays, BNP Paribas, Citigroup, Deutsche Bank, HSBC
Mersin, 5.375% 15nov2024, USD	USD	600	Citigroup, HSBC, DBS Bank
mBank Hipoteczny, 0.242% 15sep2025, EUR	EUR	300	Commerzbank, Erste Group, LBBW, Helaba
Sazka, 4.125% 20nov2024, EUR	EUR	300	Citigroup, Credit Suisse, HSBC, JP Morgan, Societe Generale, RBI Group

The biggest bond issued was a sovereign $2.5bn issue that matures in 2024 and carries a coupon of 5.6% and a yield of 5.7%. Investors snapped the bond up despite Turkey’s problems, sending the spread over the benchmark US treasuries down to 407bp from the 470bp that the last Turkish issue commanded.

After numerous crises in recent years, Turkish President Recep Tayyip Erdogan is once again trying to pump the economy up by injecting credits and leading Turkish corporates have also been to market to issue bonds to eager investors, thanks to the attractive yields the Turkish state and companies are willing to pay.

The operator of Turkey’s Mersin International Port also raised a new $600mn five-year bond backed by the European Bank for Reconstruction and Development (EBRD). Mersin operates the country’s largest port terminal by both tonnage capacity and import/export container throughput and the EBRD bought $90mn worth of the bond, giving it a seal of approval.

All-in-all Turkish companies accounted for 40% of the bonds issued in November with Romania and Czechia taking up the next two slots with 16.9% and 11.6% respectively.

Amongst the other big issues was Czech utility company CEZ Group which raised €700mn, Polish mortgage bank mBank Hipoteczny with €300mn to fund its business, and Sazka, the pan-European lottery business, that issued a similar bond.

The bond action in Eastern Europe was more subdued, partly because Russian companies were not active in November. Normally Russia accounts for the lion’s share of bonds issued by companies in the east, but this November it only accounted for slightly more than a third: countries in the Commonwealth of Independent States (CIS) issued a total of $2bn worth of bonds with 14 issues, whereas Russian companies accounted for $746mn of that with nine issues.

November brings the total issued in the CIS to $29.9bn, which is ahead of the $23.8bn issued by this time last year thanks to a very active spring for Eastern Europe’s bond markets. But the result is well behind the $40.9bn that was issued over the first eleven months of 2017, one of the strongest years for bond issues since the boom years of the noughties.

From that $29.9bn raised in the CIS since January, Russia accounts for $20.4bn, which only highlights how slow a month November was for Russian issuers. As bne IntelliNews has written elsewhere, Russia is suffering from a crisis of confidence in recent years that has led companies and the state to deleverage rather than borrow and invest.

Having said that, the $20.4bn that Russian companies have raised over the first eleven months of this year is still well ahead of the $12.6bn raised by this time last year, but less than the $27.3bn raised in the vintage year of 2017.

Top CIS issues in Nov 2019
Issue	Currency	Volume (m.)	Lead Managers
NaftoGaz, 7.625% 8nov2026, USD	USD	500	Societe Generale, Gazprombank, ING Bank, Sberbank CIB, VTB Capital and others
Alfa-Bank, 5.95% 15apr2030, USD	USD	450	JP Morgan,Alfa-Bank
DTEK RENEWABLES, 8.5% 12nov2024, EUR	EUR	325	RBI Group, Renaissance Capital
UzPromStroyBank, 5.75% 2dec2024, USD	USD	300	Citigroup, Commerzbank, JP Morgan, RBI Group
RusGydro, 6.8% 25nov2024, RUB	RUB	15 000	Gazprombank, JP Morgan, VTB Capital, Sberbank CIB

Ukrainian companies were active on the bonds markets in November jumping on the coat tails of successful sovereign issues and the improving state of the economy, which has now clearly stabilised after wobbling in 2018. Inflation has begun to fall fast, leading the National Bank of Ukraine (NBU) to make a series of huge rate cuts that still leave the country with one of the highest real interest rates in the world. The high rates have also meant that the hryvnia is strong and after gaining about 17% YTD by November is one of the best performing currencies in the world.

After more than two decades of neglect, both state and privately owned companies and banks are stepping into the bond market to raise money for big investment programmes. State-owned national gas company Naftogaz raised $500mn with a seven-year bond and privately owned energy holding DTEK placed its first “green” bond for a five-year €325m with a 8.5% coupon that allowed the company to finish restructuring its debt.

DTEK has been investing heavily into renewable energy projects all year as Ukraine is trying to wean itself off reliance on Russian gas, and specifically DTEK said the money raised would be used to build the Tylihulska wind farm among other projects.

From the Russian issuers the two most significant were the hydropower utility RusHydro that raised RUB15bn for its investment programme as the power sector in Russia is undergoing a reform, and leading privately owned Alfa Bank that raised $450mn to fund its business.