Russia & CIS
By late 2017, to the surprise of naysayers, the Russian economy appeared to have successfully navigated a challenging sanctions-riddled period and by Q1 2018 was looking to be one of the better EM stories on the market. But the latest escalation in tensions with Washington, along with broader EM outflows, have seen the country’s issuance pipeline dry up even as economic fundamentals remain strong, especially relative to the struggling peers like Turkey and Argentina.
Following up on its recent “double bill” international bond, the former Soviet republic hit the market again at a tough time, but the notes proved popular with international investors and saw some of the highest oversubscription levels in the sovereign space over the past year.
The common denominator linking the US Trade War with China, sanctions against Russia and the attacks on Syria was that there were no attempts made to find solutions to these conflicts within multilateral institutions, such as the UN and the World Trade Organisation (WTO). The word used to describe the act of seeking justice outside the formal framework of the law is vigilantism. Vigilantism leads to abuses of power, miscarriages of justice and insecurity. The descent into vigilantism will make the world a less safe place.
Renaissance Capital has in the past two years overseen and participated in a significant volume of DCM deals out of Russia and the CIS, positioning itself as one of the top dealmakers for Russian corporates looking to tap the international markets. Dmitry Gladkov, the Global Head of Financing at Renaissance Capital, shares his assessment of the market and the bank’s role in it, as well as his vision of where the investment bank sees the biggest growth opportunities in the coming months.
The Central Asian Republic saw 9x peak oversubscription and impressive yield tightening of nearly 900bp with its inaugural Eurobond transaction to source funds for the construction of the world’s tallest dam.
Just a few years ago, barely any debt capital markets investors would have paid much attention to regions like Central Asia and the CIS. Yet with overwhelming demand for sovereign notes issued by the likes of Belarus and Tajikistan, regular issues from Kazakhstan and a highly anticipated debut Eurobond from Uzbekistan, the region is putting itself on the EM fixed income map.
Driven by the need for greater transparency and efficiency, blockchain is making its first inroads into the capital markets and bank operations more broadly. The technology could be a gamechanger for emerging markets, according to CFOs and analysts.
Promsvyazbank, one of a number of large private lenders to be taken under the government wing over the past year, is set to assume an unusual role of the Russian military’s main coffer. Manulife senior analyst Richard Segal considers the prospects of such a specialized lending institution in a challenging landscape of sector consolidation and international sanctions.
As Russia re-emerges from the sub-investment grade mire, Ashmore's Head of Research Jan Dehn questions the sensibility of the original downgrade and, more broadly, the approach credit rating agencies take on assessing sovereign risk.
CASE STUDY: Credit Bank of Moscow Achieves Tightest Coupon for Russian Private Financial Institution
Russia’s second largest private lender defied the difficult market environment and negative sentiment in the sector to achieve the lowest coupon for a Russian financial institution and a well-balanced orderbook of investors.
- Ukraine Makes Strides Forward Despite Lingering Corruption Woes
- Brown Brothers Harriman: Frontier Sovereign Rating Model for Q1 2018
- Russia: Western Banks in Wait-and-See Mode Amid Consolidation, Sanctions Risk
- Eurotorg CIO: ‘DCM debut positions us well for more deals’
- ACRA, Russia’s Credit Rating Revolution, and Red Herring Reform
15 Jun 2018