The global search for yield has driven mainstream European hedge funds and real money investors to look East, which has led to consistent asset price inflation and yield compression as price anomalies are arbitraged out. Political risk factors are seen broadly as being de minimis, benefiting equity, bond and currency markets. As yet, primary capital market activity from the region has not kept pace with investors’ interest levels, and there remains a solid bid for the right name at the right pri

Kurt Geiger, of the EBRD, at a panel on the subject at the European Securitisation Forum’s 2006 conference in Venice said: “Europe is potentially a very big market for securitisation. We’re seeing big interest from many people in these countries and, although they might not all come to fruition, we have 10-15 deals currently in the pipeline.” As with many emerging structured finance markets, future flow transactions characterised early activity, as such deals constitute simple and secure financi

ECM activity has grown rapidly in Eastern Europe, providing banks that cover the region with healthy flows in recent years. However the lack of large attractive businesses meant bankers had to cast their nets widely and deals took many months or years to come to fruition. Volumes were boosted substantially by privatisation activity, but this was also hard to complete, offered low fees and was still limited in number. The picture has changed substantially in the past 12 months owing to the flow o

In volume terms, the Eastern European market is small. According to Thomson Financial, last year borrowers from the Visegrad countries (Czech Republic, Hungary, Poland and Slovak Republic) plus Slovenia, Bulgaria, Romania and Croatia signed just 68 loans for around US$18bn compared to Russia, which clocked up 83 loans for over US$48bn. In general, the Eastern European market is constrained by a limited number of large borrowers and a highly liquid local bank market, which is largely foreign owne

Last year was a landmark year for the Russian loan market. Borrowers were able to access the market at a quantum and a price unimaginable just a year before. This trend culminated at the end of 2005 when Rosneftegaz completed a US$7.5bn loan to fund its acquisition of a stake in Gazprom. This was then followed by Gazprom itself, which signed a US$13.1bn loan to fund its acquisition of Sibneft, Russia's fifth largest oil firm. This access to big-ticket event-linked finance has been accompanied ac

The City of Moscow completed its latest issue, a 10-year, on April 12. "Interest rates were rising in the domestic market, but we still managed to place a 10-year issue at a rate of 6.90%. With inflation at 11-1/2%, it shows the demand for good quality assets," said Sergey Pakhamov, chairman, Moscow State Debt Committee. Although obviously pleased with the outcome, the result was not necessarily good for the development of the market. "There is too much money chasing too few quality assets. We n

Aside from the usual bumper sovereign issuance from Turkey, EU candidate governments have been notable for their absence from the Eurobond market again this year. In Bulgaria, a tight fiscal policy has put the emphasis on debt retirement, while Croatia has made it clear that domestic markets will satisfy its financing needs for the foreseeable future. Romania remains a potential issuer: some officials have mentioned a desire to launch a €500m to €1bn 15-year Eurobond, but there have been so many

The pace of expansion over the past two years in Central and Eastern Europe, the former Soviet Union and the Baltic States continued to exceed the levels of most other regions of the world. Market reforms have advanced in many countries but economic growth remains below rates witnessed during previous episodes of rapid expansion, such as the growth of Western Europe in the post-war period. Two years after joining the European Union, the eight countries of Central Europe and the Baltic States con