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Turkey's state-controlled Halkbank sold its second ever dollar-denominated bond, a $750m benchmark 7-year issue, on January 29 at a price of 255 basis points (bp) over mid-swaps, according to unnamed sources cited by newswires.

The rate on the bond corresponds to a 4.04% yield, according to data compiled by Bloomberg. Halkbank's only other dollar issue, a five-year paper due in 2017, sold in July at a yield of 4.875%.

With an original price guidance of 270bp over mid-swaps, pricing apparently tightened during the latest sale, although the bank has yet to confirm the issue, with information offered by unnamed sources. The strong pricing reflects the ongoing emerging market bond rally, as well as recent sentiment on Turkish assets driven by Fitch's upgrade to investment grade for the sovereign in November, and continued speculation that Moody's Investors Service will soon follow suit.

That said, news this week that Moody's is set to remain on pause for the short term at least has helped knock bond prices, the currency and equities in recent days. Concern that improved growth in 2013 could yet worsen the current account deficit - a worry that has seen the central bank suggest it could tighten monetary policy - is also helping to produce volatile trade in Turkish assets.

However, the bigger picture is that the improved outlook on the sovereign has provoked reports of a coming wave of Turkish corporate debt, with banks at the forefront. Halkbank, rated Ba2 by Moody's and BBB- by Fitch, is set to be one of several tapping the bond market this year in dollars and for Eurolira notes, points out Euroweek. Akbank finished a roadshow for its Eurolira deal on January 29.