Strong demand at Turkey’s first dollar bond sale since Moody’s junk rate

By bne IntelliNews October 17, 2016

Turkey’s Treasury borrowed $1.5bn in a reopening of dollar-denominated notes due October 2026, the first dollar bond issue since the country received a second junk rating in the weeks following a failed coup attempt. The issue attracted strong demand, with bids at $5.5bn, suggesting that international investors may be shrugging off the domestic political noise  and other concerns over the $720bn economy that is heading toward a slowdown.

With this latest issue, the Treasury has borrowed a total of $5.5bn on the international markets this year. The proceeds from the reopening of the 2026 bond will enter the Treasury’s coffers on October 20.

The offering attracted an orderbook of more than three times the actual issue size from more than 150 accounts, the Treasury said in a statement on October 14. “38% of the bonds were sold to investors in the US, 35% in the UK, and 17% in Turkey, 9% to other investors in Europe and the remaining 1% in other regions in the world”. The 2026 bond has a coupon rate of 4.875% and a yield to investor of 4.750%.

International Bond Issuances in 2016

 

Issue Date

Currency

Size

Maturity Date

CouponRate (%)

Price

(%)

Yield to Investor

(%)

Yield to Investor (Spread)

09.03.2016

USD

1.5bn

09.10.2026

4.875

98.977

5.00

UST + 316.3 bps

04.05.2016

USD

1.5bn

17.02.2045

6.625

117.781

5.40

UST + 271.7 bps

20.10.2016

USD

1.5bn

09.10.2026

4.875

100.982

4.75

UST + 298.8 bps

International Lease Certificate Issuance in 2016

08.06.2016

USD

1.0bn

08.06.2021

4.251

100.000

4.251

MS + 290 bps

 

 

 

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