LONDON, April 28 (Reuters) - Market panic over Greece is
forcing bond issuers from developing nations in Europe to either
postpone their deals or offer hefty new issue premiums to lure
buyers.
As late as last week and amid an explosion in Greek yields,
emerging issuers like Russia and Egypt were able to place bonds
at pricing considered tight, along with Ukrainian
quasi-sovereign Ukreximbank.
But now fears Greece will not get international aid in time
to stave off default have spilled over into emerging markets.
Albania, which completed a roadshow on Wednesday for its
maiden euro-denominated bond, is likely to be the first
sovereign issue to be affected, while the Czech Republic will
hold off on an expected Eurobond due to the turmoil, its finance
minister said on Wednesday.
Most of the names on the roster for this week were from the
former Soviet Union, with Ukraine's Privatbank and Metinvest
holding roadshows along with Kazakhstan's Kazmunaigaz and
Zhakmunai. Another Kazakh quasi-sovereign Kazatomprom also has
mandated for a bond, with roadshows due next week.
"Most issuers are really nervous but the general expectation
is for Greece to be bailed out. What we are seeing is that if
they offer a decent new issue premium, deals are getting done,"
said Okan Akin, a corporate debt strategist at RBS in London.
"It will be on a case-by-case basis. For really high yield
single B names, it will be more difficult."
State-run oil firm Kazmunaigaz, marking the first issue from
Kazakhstan since some banks last year restructured debt, was
forced to double the new issue premium offered to buyers.
In the developed markets space, European transport group
National Express delayed a bond sale. Click on [].
Following is a list of emerging European bond issues that
may be affected by the Greek market turmoil.
ALBANIA
Albania's debut euro-denominated bond was expected to launch
later this week but the country's central bank governor said on
Wednesday that the bond was bound to be affected by the Greece
turmoil. [].
Parliament has authorised the finance ministry to borrow up
to 400 million euros at a yield of 7.5 percent with a five-year
maturity, but market participants speculate terms will have to
be more generous, given Albania's proximity to and ties with
Greece.
CZECH REPUBLIC
The Czech Republic will hold off on an expected Eurobond due
to the market turmoil, finance minister Eduard Janota said on
Wednesday. The Czechs have said they would likely raise 1 to 2
billion euros in a 10-15 year bond in the first half. Markets
had expected that the issue was close, and Janota said earlier
this month that initial demand was strong. []
KAZMUNAIGAZ
The Kazakh borrower is going ahead with its bond despite the
market conditions, but has been forced to set the premium for a
10-year issue significantly higher than initial guidance.
It set guidance at 7.25 percent or 350 bps over U.S.
Treasuries compared with a 275 bps premium offered earlier.
The bond will likely be for $1 billion to $1.5 billion. An
existing $1.6 billion 2018 bond for the issuer is trading around
6.5 percent. <KZ037364100=RRPS>
"Initially they talked of a 30 bps new issue premium and now
they have doubled the premium," said one banker in London.
Click on [].
KAZATOMPROM
Kazakh state nuclear company Kazatomprom plans to issue a
Eurobond following a roadshow in early May.
OTHER CORPORATES
Kazakh oil firm Zhakmunai along with Ukraine's Privat Bank
and steelmaker Metinvest have also been holding roadshows for
deals.
(Compiled by Sujata Rao and Carolyn Cohn; Editing by Ron
Askew)
