With the war in Ukraine adding to global volatility in capital markets, investment banking deal flow was weak in central and eastern Europe during 2022 and early 2023, especially for lower-rated names.
“Capital markets in our region had the double whammy of the proximity of the war in Ukraine as well as overall market dislocation and volatility,” says Marzena Fick, Citi’s head of investment banking for central Europe. “Business effectively came to a standstill for the first few months of the war. In a difficult market, a lot of the deal flow will naturally come from the top-tier names, including governments.”
Nevertheless, Citi can still boast a range of client activity across the region that is hard to beat, allowing it to retain the title of central and eastern Europe’s best investment bank.
Citi was bookrunner on Poland’s biggest-ever international bond syndication, a $2.5 billion 10- and 30-year deal in March 2023, and on a maiden sustainability-linked bond from Czech power company CEZ. It was global coordinator on a rare non-sovereign bond deal from Turkey, raising $500 million for Turk Eximbank in January.
Its deals went well beyond the normal names and the big economies, including benchmark Eurobond deals for Estonia in late 2022 and for North Macedonia and Serbia in early 2023.
In financial institutions, Citi was bookrunner on OTP Bank’s debut dollar bond in February and on a €300 million senior preferred bond issue by Slovenian bank NLB in July, before later arranging a €1.25 billion sustainability bond for the Slovenian sovereign in January 2023. Other debt deals include a $500 million revolving credit facility for CTP’s sustainability-linked programme and an €863.5 million environmental, social and governance-linked debt package for DCT Gdansk.
Although deal flow was thin in equity capital markets, Citi was global coordinator on accelerated equity offerings from Kaspi in the Czech Republic and TBC Bank in Georgia. It also acted as sole global coordinator on a $125 million mining special purpose acquisition company IPO for ACG Acquisition.
Capital markets in our region had the double whammy of the proximity of the war in Ukraine as well as overall market dislocation and volatility
Marzena Fick
In M&A, Citi was the top adviser in Dealogic’s volume rankings. That was largely driven by work for Polish state energy company PKN Orlen in its €3.7 billion takeover of Grupa Lotos and €10.4 billion takeover of PGNiG. The latter was Poland’s biggest-ever M&A deal.
It is important to note that Citi’s advisory work went well beyond these state-driven deals. It advised PPC on its €1.9 billion acquisition of Enel’s Romanian operations, Koc Holding on its €400 million acquisition of Stellantis Turkey and Qatar Investment Authority on its acquisition of a minority stake in Turkish restaurant chain D.ream from Dogus Group. It also advised on KBC’s acquisition of UBB in Bulgaria, which completed during the awards period.
