Poland

Poland has returned to the dollar market after its ratings downgrade and, in printing with the lowest new issue premium for a dollar CEEMEA sovereign bond this year, has knocked out any lingering concerns about appetite for its debt.

Poland has released price guidance for its first international dollar bond since its tumultuous January euro print.

The only spot of new bond activity in the CEEMEA market so far in this week was Poland’s first dollar deal of the year, but there was plenty of loans market activity in the region to keep bankers occupied.

Poland is considering a Panda bond issue, and is hoping to meet investors in China in the second quarter of this year for the deal, according to a source in Poland’s Ministry of Finance.

TriOptima the over-the-counter post-trade service provider, has torn up more than $750tr in notional principal outstanding contracts since it launched its compression service for OTC derivatives in 2003, the firm said on Monday.

Bodgan Klimaszewski is no longer deputy director of the public debt department. Instead, Robert Zima has been promoted into the job.

Bahrain joined Poland this week in the dubious honour of being downgraded by Standard & Poor’s after the pricing of a new bond but before settlement.

Emerging market bankers are saying that greater scrutiny may now need to be paid to the ratings calendar when printing bonds after Standard & Poor’s downgrade of Poland on Friday prompted one of the worst sell-offs of an EM new issue in recent memory.

Poland’s sovereign bond spreads are in turmoil, after a shock downgrade by Standard & Poor’s (S&P) late last week. The move follows a sharp drop in its political risk score in the latest Euromoney Country Risk (ECR) survey.

Standard & Poor’s unexpectedly downgraded Republic of Poland to BBB+ on Friday, causing a large sell-off of the sovereign’s debt just a week after it printed a dual tranche €1.75bn Eurobond.

Republic of Poland’s €1.75bn dual tranche market reopener underperformed on the break on Tuesday. The deal drew criticism for printing too tight and too wide, based on which comparable was used, but the Polish Ministry of Finance called the note a success.

Two deals from Poland and Slovakia this week showed how emerging market borrowers and their bankers need to come up with new ways to price CEE bonds, and fast. With European quantitative easing distorting secondary prices to the point of uselessness, deals should now factor in a ‘liquidity premium’, writes Virginia Furness.