CEEMEA borrowers are used to a somewhat decorous, hierarchal way of market reopening after times of turmoil. This time it is different.
After any prolonged period of market volatility and a subsequent hiatus in CEEMEA new bond issuance, there is a conventional way in which to resume bond sales. Typically, there comes a grand old dame of the emerging market sovereign universe — investment grade of course and usually with a long history of bond issuance.
That sovereign sells its bond without too much of a hitch, along comes the next well respected and loved investment grade sovereign issuer and so forth until there is enough confidence in these deals that buyers are willing to slip down the credit curve.
But there will have been a few mini reopenings of the CEEMEA bond market by the time April ends. One followed the disruption of the recent banking crisis and another will be needed once the Easter holidays and US inflation data is released later this week.
The usual suspects have already done their deals. The market was so buoyant in January that many investment grade CEEMEA sovereigns tapped the market as soon as was possible and do not need to print anything now.
Unusually, therefore, other borrowers are becoming the pathfinders of the primary market. Poland, a classic IG sovereign issuer, may have brought a deal a fortnight ago to draw a line under the market disruption. But so did Al Rajhi, a non-government linked IG credit from Saudi Arabia.
The last week, IG rated, government-owned Saudi Electric Company priced a deal. But so did sub-IG rated Jordan and Bahrain.
This is a much broader range of credits than came to the market in January and at a time, arguably, of greater distress. Nonetheless, all priced credible deals that drew big order books, were priced tighter than guidance and where the secondary market performance so far has done nothing to terrify investors.
That should give issuers and investors looking at this market great confidence. The path of central bank interest rate policy and macroeconomomic expectations remain, of course, the biggest influences on which issuers can access the bond market.
But for those borrowers, especially the lower rated, still wondering the market will welcome them; if they are flexible enough to be able to come to market quickly, there are plenty of signs, however unconventional, that deals are possible.