20180319-法国巴黎银行-CEEMEA_Credit_Update__9页_251kb

报告摘要

CEEMEA Credit Update Summary – 19 March 2018

Core Content Overview

This document provides a detailed credit market update for the CEEMEA (Central and Eastern Europe, the Middle East, and Africa) region, focusing on market performance, supply dynamics, fund flows, and specific issuer developments.

Market Performance

EM Credit underperformed DM last week, with Sovereign Cash (EMBIG) trading 5bp wider, resulting in a 2% loss since the start of the year.
EM BBB-/BB Corporates also widened by 5bp, trading at a 126bp pickup over US BBB-, close to this year's highs of 137bp.
CDS started to give back some gains due to the recent roll.
UST 10Y is expected to trade in-range, with the FOMC rate decision likely to be a minor event (25bp hike, with a potential shift in the Fed's dot plot to four hikes this year).
The dollar is expected to weaken, following in-line CPI and softer wage data, combined with strong GDP growth.

Key Events This Week

Monday: EU foreign ministers discuss North Korea and UK-Russia tensions, along with Kenya rates decision and Ukraine GDP.
Tuesday: Morocco rate decision, South Africa Q417 current account, EU update on Poland Rule of Law, and Saudi Crown Prince MBS's US visit.
Wednesday: FOMC rate decision (+25bp).
Thursday: BoE rate decision (no change), EU flash PMIs, Brexit guidelines review, and US-EU trade discussions.
Friday: CBR rate decision, and expected rating reviews for Croatia, Ghana, Kenya, Latvia, Poland, and South Africa.

Supply Dynamics

Global EM issuance reached $166bn year-to-date, with CEEMEA contributing $54.452bn.
Net supply for CEEMEA was $29.788bn ytd, indicating continued market activity.
Secondary market performance of new deals has been sluggish, despite most being priced at a premium, suggesting weak investor sentiment.

Fund Flows

EM bond funds experienced outflows of -$0.7bn last week, with hard currency funds seeing -$0.3bn outflows.
This reflects increased volatility and uncertainty in the market due to trade tensions and political changes.

Issuer Developments

KZOKZ '47

KZOKZ (Kazakhstan Oil & Gas) bonds trade tight against the sovereign, with a 80bp pickup.
Despite the recent widening, the credit quality give-up is among the highest in the quasi-sovereign sector.
Supply risks at the long end of the KMG curve remain elevated, even after the KMG E&P equity tender.
Refinancing needs for NC KMG are estimated at c.$1.3bn, which may be market-fundable.
Unsuccessful tenders in the past year suggest the company may consider LME to reduce the stock of old notes.

OPRORU

S&P placed OPRORU (O1 Properties) on CreditWatch Negative due to uncertainty surrounding its sale to Laysa Group.
CoC trigger and credit linkages with parent O1 Group raise concerns, especially given the default of Prime Finance.
The company may not be able to meet $350mn in cash outflows, making investment in OPRORU $8.125% 21 unattractive at current valuations.

RUALRU and GMKNRM

Potanin's Interros increased its stake in Norilsk Nickel to 32.9%, with a 2.1% purchase contingent on a court ruling.
RUALRU and GMKNRM bonds have underperformed, but the report suggests value in RUALRU $5.125% 22 and GMKNRM $5.55% 20 relative to the sovereign.

Tables Summary

Table 1 and 2: EM Cash and CDS Spread Summary

EMBIG widened 5bp week-on-week, with a 2% loss since the start of the year.
EM BBB-/BB Corporates widened 5bp over the US BBB-.
CDS spreads also widened, with CDX EM Global down 10bp w-o-w.

Table 3: Recent CEEMEA Issuance Performance

New issues showed flat to slightly negative price performance.
Despite premium pricing, secondary market demand was weak, indicating selective investor behavior.

Table 4: KZOKZ '47 vs Sovereign

KZOKZ '47 trades tight at 80bp over the sovereign.
Credit quality give-up is 1.3 notches, among the highest in the sector.

Table 5: EM Global and CEEMEA Issuance

Global EM issuance remains elevated, with CEEMEA contributing a significant share.
Net supply for CEEMEA was $29.788bn ytd, with $102.496bn net issuance globally.

Charts Summary

Chart 1: EMBIG widened 5bp for a 2% loss since the start of the year.
Chart 2: EM BBB-/BB Corporates widened 5bp over US BBB-.
Chart 3: EM bond funds had -$0.7bn total outflows, with -$0.3bn from hard currency funds.

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