Turkey plans lowered debt issuance in October

By bne IntelliNews September 30, 2016

Turkey will seek to raise TRY1.9bn (€564mn) in one domestic debt auction in October, the Treasury said on September 30 as it published its borrowing programme for the three months to December. 

The issuance plan for October is sharply down from the TRY12.4bn the Treasury raised in eight domestic auctions in September. Stong demand helped bring yields below market expectations despite concerns over Moody’s rating downgrade.

The Treasury will offer for sale five-year fixed-coupon bonds (re-open) at its single auction next month to be held on October 25. 

Debt redemption in October is seen at TRY2.1bn, with the heftiest repayment scheduled for October 26, when the Treasury will redeem TRY1.1bn of debt (TRY845mn to the market).

Domestic borrowing for November is planned at TRY10bn through four auctions, versus TRY10.6bn debt redemption. In December, the Treasury plans to borrow TRY5.1bn via two domestic auctions, while debt redemption is projected at TRY5.3bn.

Turkish Treasury completed 2015 with a successful borrowing performance and has so far this year faced no concrete problems in domestic borrowing. The main risk perception for Turkey is actually over the private sector’s foreign borrowing ability. Yet, the private sector has also not faced a significant problem yet.

The Treasury completed 2015 with a total borrowing of TRY97.9bn against debt redemption of TRY131.3bn. For this year, the Treasury will redeem TRY120.4bn debt, including TRY94bn domestic and TRY26.5bn external debt redemption. It plans to borrow TRY79.9bn from the domestic debt market, to issue $4.5bn worth of debt on the foreign market and to obtain $5.5bn in loans from international financial institutions. It will also seek to raise TRY24.3bn from privatisation deals, the Treasury announced on January 29.

Turkish Treasury's Domestic Borrowing Programme
Redemptions      
(TRY mn) Market Public Total
05-Oct  777  208  985
26-Oct  845  255  1,100
October  1,623  463  2,086
November  8,344  2,300  10,644
December  4,492  841  5,333
Auctions      
25-Oct 5-year / 1,792 days re-open fixed-coupon
Planned Borrowing (TRY bn)      
October 1.9    
November 10.0    
December 5.1    
Source: treasury      

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