Istanbul-listed QNB Finansbank sells $300mn 10-year subordinated eurobond at 10.75% coupon

By Akin Nazli in Belgrade November 10, 2023

QNB Finansbank (QNBFB), a unit of Qatar National Bank (QNB), has sold $300mn worth of 10-year subordinated (Tier IIeurobonds at a coupon rate of 10.75%, the bank said on November 10.

Citibank (Citigroup/New York/C), JPMorgan (New York/JPM), Dubai-based Mashreq PSJC (Mashreqbank), Mizuho Bank (Tokyo/8411), Qatar National Bank (QNB) Capital, Standard Chartered Bank (London/STAN) and Societe Generale (Paris/GLEacted as bookbuilders in the deal.

The paper is callable at the end of the fifth year. The market norm for Turkish banks has generally been to call Tier 2 debt after five years. (See the full list of Turkish banks’ subordinated eurobonds below).

Isbank (ISCTR) has the next callable paper (XS2106022754) among Turkish banks. In May, it decided not to recall its $500mn of 11-year subordinated (Tier II) eurobonds (XS1623796072/US90016BAF58), sold in 2017 and callable on June 29, 2023.

In July, Akbank (AKBNK), the big-cap unit of Turkish conglomerate Sabanci Holding (SAHOL), sold $300mn worth of 10-year subordinated (Tier IIeurobonds at a coupon rate of 9.60% to the US International Development Finance Corporation (DFC), Beijing-based Asian Infrastructure Investment Bank (AIIB) and the World Bank Group's International Finance Corporation (IFC).

In 2019, QNB Finansbank sold $500mn worth of paper (XS1959391019) due September 2024 at a coupon rate of 6.875%.

Chart: QNB Finansbank’s non-deposit funding composition at end-March.

In parallel with local peers, QNB Finansbank, the eighth largest bank in Turkey with Turkish lira (TRY) 783bn ($27bn) of assets at end-June, has a B-/Stable (one notch below Turkey’s sovereign rating and six notches below investment grade) from Fitch Ratings and a B3/Stable (six notches below investment grade in line with Turkey’s sovereign rating) from Moody’s Investors Service.

Looking at the global markets, there is no turbulence of note shaking sentiment. Turkey’s five-year credit default swaps (CDS) remain below the 400-level, while the yield on the Turkish government’s 10-year eurobonds remains below the 9%-level.

On November 8, Turkey’s Treasury sold $2.5bn of a sukuk paper (XS2689091846) due January 2029 at a coupon rate of 8.51%.


Turkish banking industry outstanding subordinated (Tier II) eurobonds
Issuer ISIN Coupon Volume (mn) Issuance Maturity
Albaraka Turk XS1301525207 9.371% $250 Nov 30, 2015 Nov 30, 2025
Kuveyt Turk (sukuk/subordinated) (RECALLED) XS1323608635 7.900% $350 Feb 17, 2016 Feb 17, 2026 (/21)
Akbank (subordinated) RECALLED XS1574750292 7.200% $500 Mar 15, 2017 Mar 16, 2027(/22)
TSKB (subordinated) RECALLED XS1584113184 7.625% $300 RECALLED Mar 29, 2027(/22)
Garanti (subordinated) XS1617531063 6.125% $750 May 23, 2017 May 24, 2027(/22)
Odeabank (subordinated) XS1655085485 7.625% $300 Aug 1, 2017 Aug 1, 2027(/22)
Vakifbank (subordinated) RECALLED XS1551747733 8.00% $228 Feb 13, 2017 Nov 1, 2027(/22)
Fibabanka (Credit Europe) (subordinated) XS1706923148 7.25% $150   Nov 9, 2027(/22)
Fibabanka (subordinated) (exchange offer cancelled) XS1386178237 9.797% (7.75%) $300 May 10, 2017 Nov 24, 2027(/22)
Akbank (subordinated) RECALLED XS1772360803 6.797% $400 Feb 27, 2018 Apr 27, 2028(/23)
Isbank (subordinated) XS1623796072 7.000% $500 Jun 29, 2027 Jun 29, 2028(/23)
Isbank (subordinated) XS2106022754 7.75% 750 Jan 16, 2020 Jan 22, 2030(/25)
Yapi Kredi (YKBNK) (subordinated) XS2286436451 7.875% $500 Jan 15, 2021 Jan 22, 2031(/26)
Akbank (subordinated) XS2355183091 6.80% $500 Jun 15, 2021 Jun 22, 2031(/26)
Kuveyt Turk (sukuk/subordinated) XS2384355520 6.125% 350 Sep 10, 2021 Dec 16, 2031
Sekerbank (SKBNK) (subordinated) - - 85 May 4, 2022 Jun 12, 2032 (2027)
Akbank (subordinated) XS2611752317/XS2611752663/XS2611747234 9.60% 300 Jul 25, 2023 Jul 25, 2033(/28)
QNB Finansbank (QNBFB) (subordinated) XS2678233243 10.75% 300 Nov 9, 2023 Nov 15, 2033 (/28)
Albaraka Turk (sukuk-subordinated) RECALLED XS1772390628 10.0% $205 Feb 20, 2018 Perpetual (Feb 20, 2023)
Yapi Kredi (YKBNK) (subordinated) XS1867595750 13.875% $650 Jan 15, 2019 Perpetual(Jan 15, 2024)
Kuveyt Turk (sukuk/subordinated) XS2028862998 9.13% $200 Jul 16, 2019 Perpetual
Kuveyt Turk (sukuk/subordinated) XS2227803819 9.95% $50 Sep 28, 2020 Perpetual


Table: Turkish banking industry's outstanding subordinated (Tier II) eurobonds.


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