QNB Finansbank (QNBFB), a unit of Qatar National Bank (QNB), has sold $300mn worth of 10-year subordinated (Tier II) eurobonds 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/GLE) acted 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 II) eurobonds 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%.

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