Pulse survey: CEE corporates eye domestic bond growth
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As 2014 came to an end Euromoney Research Group asked corporate funding officials for their views on key topics affecting companies in Central and Eastern Europe. From the fraught situation in Ukraine to plans for seeking international credit ratings, find the exclusive results of the survey here.
43% of corporates say their funding programmes have been impacted by the Ukraine crisis
40% of funding officials are interested in accessing the international bond markets
Domestic bond markets across the region are expected to increase in size and in importance as a source of funding
Most companies find sufficient bank financing remains available locally
Turkish and Romanian companies most likely to seek international credit ratings
Cost remains the most important factor in deciding funding mix
Funding officials at some of central and eastern Europe’s leading companies are evenly split about the impact of the crisis in Ukraine on their funding programmes, according to a survey from Euromoney Research Group.
While 47% of respondents said that the Ukraine situation has had no impact on their ability to fund, 43% reported that the implications of economic and financial sanctions against Russia and regional turbulence have had some impact. Of those, one quarter said that major markets were now closed to issuance.
However, the general outlook of the 59 companies that took part in the survey demonstrates confidence. Despite concerns about the provision of credit across the banking sector in central and eastern Europe, 70% of respondents said sufficient bank financing was available in their home market to meet their funding requirements.
There is widespread optimism for the development of domestic bond markets in the region: 55% of funding officials expect local debt markets to grow over the medium term, while fewer than 5% thought domestic markets would contract.
In addition, domestic bonds are the funding source they expect to gain most in importance in the next few years.
The companies in the survey come from a variety of sectors including auto, retail, telecom, finance, consumer goods and utilities and have annual funding programmes averaging well over $100 million. They draw on a range of sources to meet their finance needs. Working capital facilities and trade finance were considered the most important both currently and in predicted funding programmes over the next two or three years.
The clear majority of companies – 80% – have yet to issue in the international bond markets, and most do not have an international credit rating.
However, more than 40% said they either wanted more information about issuing, or were already considering accessing the international bond market in the next three years.