CEE Eurobond issuance Review

Unicredti notes its views on CEE Eurobond issuance as follows:

• A host of Eurobond issuance is coming in CEE, particularly in EUR-denominated paper. Yields have tightened to historic lows in most paper across the region and for finance ministries this is possibly a case of "goldilocks" timing; right after the start of ECB QE and before potential pressure from rising US yields and a rebound in inflation.
  
  
• EUR-denominated paper auctions have been popular among European investment funds and banks, as highlighted by the EUR 1.5bn Croatia 10Y euro bond issue, which attracted orders of EUR 6.4bn. Similarly the EUR 1.5bn Slovakia 12Y euro bond issue attracted demand of EUR 5.5bn. We expect that, with Bund yields negative up to the 6Y tenor, support will continue, at least in the short term.
  
  
• Near term issuance is coming from Bulgaria, which is considering up to three tranches, potentially in 7Y, 12Y and 20Y issues. The BGARIA EUR 24 widened on the news, suggesting that investors are lightening positioning to accommodate new issuance. In addition, Slovenia is coming with a new 20Y EUR benchmark bond. The longest bond on the curve currently is the SLOVEN EUR 18, which has tightened 3bp since the start of ECB QE.
  
  
• Going forward, Latvia is reportedly planning a EUR-denominated issue, while Romanian authorities announced they plan to issue a EUR bond with a maturity of more than 10 years, targeting a maximum yield of 2.5%. While the MinFin announced it will come to market in 2H15, the issue could be brought forward. Serbia is also planning a EUR 1.5bn issue in 2015.