Market players have been outlining their expectations for an anticipated Turkish Treasury eurobond auction. Turkey usually holds one in the first month of the new year.
“First working week of the year—Turkey new issue has to be in the pipeline! A January new issue by Turkey—you can almost set your watch by it,” wrote Timothy Ash of BlueBay Asset Management on January 7 in a note to investors.
The previous day, unnamed bankers told Reuters that the Treasury could proceed with a eurobond issue this week but that it could also be delayed by several weeks due to reduced global appetite for such debt.
Turkish Treasury's Eurobond Issues in 2019 | ||||||||
Issue Date | Currency | Size | Maturity | Coupon (%) | Price | Yield (%) | Spread | Euro Cost (%) |
14.11.2019 | USD | 2.5bn | 14.11.2024 | 5.6 | 99.57 | 5.70 | UST+407bp | 3.319 |
10.07.2019 | USD | 2.25bn | 10.08.2024 | 6.35 | 99.563 | 6.45 | UST + 470 bps | 3.803 |
26.03.2019 | USD | 1bn | 26.04.2029 | 7.625 | 103.3 | 7.15 | UST + 454 bps | 4.859 |
21.02.2019 | USD (Sukuk) | 2bn | 21.02.2022 | 5.8 | 100 | 5.80 | MS + 318 bps | |
31.01.2019 | EUR | 1.25bn | 31.03.2025 | 4.625 | 99.36 | 4.75 | MS + 446 bps | |
16.01.2019 | USD | 2bn | 26.04.2029 | 7.625 | 99.555 | 7.68 | UST + 497bp | 4.965 |
Turkish Treasury's Eurobond Issues in 2018 | ||||||||
14.11.2018 | EUR | 1.5bn | 16.02.2026 | 5.2 | 99.73 | 5.25 | MS + 456.4 bp | |
23.10.2018 | USD | 2bn | 23.12.2023 | 7.25 | 98.917 | 7.50 | UST + 447.5 bp | |
24.04.2018 | USD | 2bn | 24.10.2028 | 6.125 | 99.427 | 6.20 | UST + 336.8 bp | |
17.01.2018 | USD | 2bn | 17.02.2028 | 5.125 | 99.411 | 5.20 | UST + 266.7 bp | |
Turkish Treasury's Eurobond Issues in 2017 | ||||||||
13.09.2017 | USD | 1.75bn | 11.05.2047 | 5.75 | 101 | 5.70 | UST + 300.5 bp | |
14.06.2017 | EUR | 1bn | 14.06.2025 | 3.25 | 99 | 3.377 | MS + 285 bp | |
11.05.2017 | USD | 1.75bn | 11.05.2047 | 5.75 | 98 | 5.875 | UST + 286.7 bp | |
06.04.2017 | USD (Sukuk) | 1.25bn | 06.04.2023 | 5 | 100 | 5 | MS + 285 bp | |
23.02.2017 | USD | 1.25bn | 25.03.2027 | 6 | 103 | 5.65 | UST + 320.5 bp | |
23.01.2017 | USD | 2bn | 25.03.2027 | 6 | 99 | 6.15 | UST + 375.7 bp | |
source: treasury |
Turkey’s 5-year credit default swaps (CDS) have been around 280bp since mid-December.
Fitch Ratings rates Turkey at BB-/Stable, three notches below investment grade. Moody’s Rating Services rates Turkey at B1/Negative, four notches below investment grade, while Standard & Poor’s has Turkey at B+/Stable, also four notches below investment grade.
At the latest eurobond auction held in November, the Turkish Treasury sold $2.5bn of 5-year eurobonds with a 5.60% coupon and a yield to the investor of 5.70%.
Major Eurobond Issues by Turkish issuers | |||||
Issuer | ISIN | Coupon | Volume (USD mn) | End of placement | Maturity date |
Fibabank | XS2096028571 | Floating | 30 | 12/31/2019 | 12/31/2029 |
Garanti Bank | XS2094608580 | 5.25% | 50 | 12/12/2019 | 12/20/2024 |
Mersin Port | XS2071397850 | 5.375% | 600 | 11/07/2019 | 11/15/2014 |
Treasury | US900123CW86 | 5.60% | 2500 | 11/06/2019 | 11/14/2024 |
Isbank | XS2041003901 | 8.10% | 50 | 08/07/2019 | 12/03/2029 |
Aktifbank | XS2034164074 | 6.50% | 40 | 07/31/2019 | 08/01/2029 |
Kuveyt Turk Bank | XS2028862998 | 9.13% | 200 | 07/02/2019 | Perpetual |
Treasury | US900123CV04 | 6.35% | 2250 | 07/10/2019 | 08/10/2024 |
Vakifbank | 150 | 06/25/2019 | 2024 | ||
Vakifbank | XS1970705528 | 8.125% | 600 | 03/21/2019 | 03/28/2024 |
Sisecam | XS1961010987 | 6.95% | 700 | 03/20/2019 | 03/14/2026 |
Treasury | US900123CT57 | 7.625% | 1000 | 03/26/2019 | 04/26/2029 |
Yapi Kredi Bank | XS1958649854 | 8.25% | 500 | 03/07/2019 | 10/15/2024 |
Koc Holding | XS1961766596 | 6.50% | 750 | 03/05/2019 | 03/11/2025 |
QNB Finansbank | XS1959391019 | 6.875% | 500 | 02/28/2019 | 09/07/2024 |
Yapi Kredi Bank | XS1957348441 | FRN | 321.6 | 02/25/2019 | 11/25/2027 |
Turk Telekom | XS1955059420 | 6.875% | 500 | 02/21/2019 | 02/28/2025 |
Treasury (sukuk) | XS1816199373 | 5.80% | 2000 | 02/21/2019 | 02/21/2022 |
Treasury | XS1843443356 | 4.63% | EUR1.25bn | 01/31/2019 | 03/31/2025 |
Eximbank | XS1917720911 | 8.25% | 500 | 01/24/2019 | 01/24/2024 |
Treasury | US900123CT57 | 7.625% | 2000 | 01/16/2019 | 04/26/2029 |
source: cbonds, intellinews |
In November, Istanbul Mayor Ekrem Imamoglu confirmed that the municipality was seeking Treasury approval for a $500mn eurobond sale.
On November 8, government-run Vakifbank received approval from the Turkish capital markets board (SPK) to issue €1bn worth of mortgage-backed securities abroad.
On December 23, Vakifbank said in a stock exchange filing that it received approval from the local banking watchdog BDDK to recall its 10-year subordinated (Tier II) eurobonds worth $500mn. The paper carries a call option at the end of the fifth year and Vakifbank will redeem the paper on February 3.
Vakifbank issued the paper in January 2015 at a yield of 6.95%.
Also on December 23, Vakifbank applied to the SPK to issue up to $5bn worth of eurobonds.
On November 18, private lender Yapi Kredi cut the issuance limit for its mortgage-backed eurobonds, already approved by the SPK, to €500mn from €1bn.
Reuters reported on October 18 that national flag carrier Turkish Airlines had mandated lenders for eurobonds or Enhanced Equipment Trust Certificates. However, nothing has been heard of the move since then.
The next scheduled eurobond redemption by the Turkish Treasury is set for May 18, 2020. A repayment of €2bn for 10-year EUR-denominated papers is scheduled. Also in 2020, the Treasury will, on June 5, redeem $2bn in 15-year USD papers. On December 3, it will redeem JPY60mn in samurai bonds.
Turkish Treasury's Outstanding Eurobonds | ||||||||
Issue Date | Maturity | Year | Currency | Face (mn) | Face ($mn) | Coupon (%) | Type | ISIN |
03/09/2008 | 11/03/2019 | 10.5 | USD | 1,500 | 1,500 | 7.000 | Bond | US900123BD15 |
01/02/2007 | 02/04/2019 | 12.2 | EUR | 1,250 | 1,618 | 5.875 | Bond | XS0285127329 |
30/04/2009 | 07/11/2019 | 10.5 | USD | 1,500 | 1,500 | 7.500 | Bond | US900123BF62 |
20/04/2010 | 18/05/2020 | 10.1 | EUR | 1,500 | 1,651 | 5.125 | Bond | XS0503454166 |
12/11/2010 | 18/05/2020 | 9.5 | EUR | 500 | 550 | 5.125 | Re-open | XS0503454166 |
02/06/2005 | 05/06/2020 | 15 | USD | 1,250 | 1,250 | 7.000 | Bond | US900123AX87 |
23/02/2007 | 05/06/2020 | 13.3 | USD | 750 | 750 | 7.000 | Re-open | US900123AX87 |
01/12/2017 | 07/12/2020 | 3 | JPY | 60,000 | 548 | 1.810 | Bond | JP579200AHQ2 |
11/03/2011 | 18/03/2021 | 10 | JPY | 180,000 | 1,643 | 1.870 | Bond | JP579200ABF8 |
11/03/2010 | 30/03/2021 | 11.1 | USD | 1,000 | 1,000 | 5.625 | Bond | US900123BH29 |
05/08/2010 | 30/03/2021 | 10.7 | USD | 1,000 | 1,000 | 5.625 | Re-open | US900123BH29 |
01/06/2016 | 08/06/2021 | 5 | USD | 1,000 | 1,000 | 4.251 | Sukuk | XS1303467077 |
05/11/2013 | 12/11/2021 | 8 | EUR | 1,250 | 1,376 | 4.350 | Bond | XS0993155398 |
13/02/2019 | 21/02/2022 | 3 | USD | 2,000 | 2,000 | 5.800 | Sukuk | XS1816199373 |
08/03/2012 | 15/03/2022 | 10 | JPY | 90,000 | 822 | 1.470 | Bond | JP579200ACF6 |
17/10/2011 | 25/03/2022 | 10.4 | USD | 1,000 | 1,000 | 5.125 | Bond | US900123BY51 |
18/01/2012 | 26/09/2022 | 10.7 | USD | 1,500 | 1,500 | 6.250 | Bond | US900123BZ27 |
16/02/2012 | 26/09/2022 | 10.6 | USD | 1,000 | 1,000 | 6.250 | Re-open | US900123BZ27 |
08/01/2013 | 23/03/2023 | 10.2 | USD | 1,500 | 1,500 | 3.250 | Bond | US900123CA66 |
30/03/2017 | 06/04/2023 | 6 | USD | 1,250 | 1,250 | 5.004 | Sukuk | XS1586385178 |
08/04/2014 | 11/04/2023 | 9 | EUR | 1,000 | 1,101 | 4.125 | Bond | XS1057340009 |
16/10/2018 | 23/12/2023 | 5.2 | USD | 2,000 | 2,000 | 7.250 | Bond | US900123CR91 |
22/01/2014 | 22/03/2024 | 10.2 | USD | 2,500 | 2,500 | 5.750 | Bond | US900123CF53 |
02/07/2019 | 10/08/2024 | 5.1 | USD | 2,250 | 2,250 | 6.350 | Bond | US900123CV04 |
17/09/2014 | 25/09/2024 | 10 | JPY | 100,000 | 913 | 1.050 | Bond | JP579200AEM8 |
06/11/2019 | 14/11/2024 | 5 | USD | 2,500 | 2,500 | 5.600 | Bond | US900123CW86 |
18/11/2014 | 25/11/2024 | 10 | USD | 1,000 | 1,000 | 4.489 | Sukuk | XS1141043296 |
13/01/2005 | 05/02/2025 | 20.1 | USD | 2,000 | 2,000 | 7.375 | Bond | US900123AW05 |
01/11/2006 | 05/02/2025 | 18.3 | USD | 1,250 | 1,250 | 7.375 | Re-open | US900123AW05 |
24/01/2019 | 31/03/2025 | 6.2 | EUR | 1,250 | 1,376 | 4.625 | Bond | XS1843443356 |
07/06/2017 | 14/06/2025 | 8 | EUR | 1,000 | 1,101 | 3.250 | Bond | XS1629918415 |
07/11/2018 | 16/02/2026 | 7.3 | EUR | 1,500 | 1,651 | 5.200 | Bond | XS1909184753 |
08/04/2015 | 14/04/2026 | 11 | USD | 1,500 | 1,500 | 4.250 | Bond | US900123CJ75 |
02/03/2016 | 09/10/2026 | 10.6 | USD | 1,500 | 1,500 | 4.875 | Bond | US900123CK49 |
20/10/2016 | 09/10/2026 | 10 | USD | 1,500 | 1,500 | 4.875 | Re-open | US900123CK49 |
18/01/2017 | 25/03/2027 | 10.2 | USD | 2,000 | 2,000 | 6.000 | Bond | US900123CL22 |
23/02/2017 | 25/03/2027 | 10.1 | USD | 1,250 | 1,250 | 6.000 | Re-open | US900123CL22 |
09/01/2018 | 17/02/2028 | 10.1 | USD | 2,000 | 2,000 | 5.125 | Bond | US900123CP36 |
16/04/2018 | 24/10/2028 | 10.5 | USD | 2,000 | 2,000 | 6.125 | Bond | US900123CQ19 |
09/01/2019 | 26/04/2029 | 10.3 | USD | 2,000 | 2,000 | 7.625 | Bond | US900123CT57 |
26/03/2019 | 26/04/2029 | 10.1 | USD | 1,000 | 1,000 | 7.625 | Re-open | US900123CT57 |
10/01/2000 | 15/01/2030 | 30 | USD | 1,500 | 1,500 | 11.875 | Bond | US900123AL40 |
30/01/2013 | 07/02/2033 | 20 | JPY | 18,400 | 168 | 2.680 | Bond | JP579200ADE7 |
07/01/2004 | 14/02/2034 | 30.1 | USD | 1,500 | 1,500 | 8.000 | Bond | US900123AT75 |
04/01/2006 | 17/03/2036 | 30.2 | USD | 1,500 | 1,500 | 6.875 | Bond | US900123AY60 |
14/11/2006 | 17/03/2036 | 29.3 | USD | 750 | 750 | 6.875 | Re-open | US900123AY60 |
17/01/2007 | 17/03/2036 | 29.2 | USD | 500 | 500 | 6.875 | Re-open | US900123AY60 |
27/02/2008 | 05/03/2038 | 30 | USD | 1,000 | 1,000 | 7.250 | Bond | US900123BB58 |
05/01/2010 | 30/05/2040 | 30.4 | USD | 2,000 | 2,000 | 6.750 | Bond | US900123BG46 |
05/01/2011 | 14/01/2041 | 30 | USD | 1,000 | 1,000 | 6.000 | Bond | US900123BJ84 |
26/06/2012 | 14/01/2041 | 28.6 | USD | 1,000 | 1,000 | 6.000 | Re-open | US900123BJ84 |
11/12/2012 | 14/01/2041 | 28.1 | USD | 1,000 | 1,000 | 6.000 | Re-open | US900123BJ84 |
09/04/2013 | 16/04/2043 | 30 | USD | 1,500 | 1,500 | 4.875 | Bond | US900123CB40 |
13/01/2015 | 16/04/2043 | 28.3 | USD | 1,500 | 1,500 | 4.875 | Re-open | US900123CB40 |
12/02/2014 | 17/02/2045 | 31 | USD | 1,500 | 1,500 | 6.625 | Bond | US900123CG37 |
04/05/2016 | 17/02/2045 | 28.8 | USD | 1,500 | 1,500 | 6.625 | Re-open | US900123CG37 |
04/05/2017 | 11/05/2047 | 30 | USD | 1,750 | 1,750 | 5.750 | Bond | US900123CM05 |
13/09/2017 | 11/05/2047 | 29.7 | USD | 1,750 | 1,750 | 5.750 | Re-open | US900123CM05 |
source: treasury |
The next scheduled eurobond redemption by a Turkish lender is scheduled for January 24, 2020 when private lender Akbank will repay $500mn (XS1111101314).
Also in 2020, state-run Halkbank will repay, on February 5, $750mn (XS0882347072) while Industrial Development Bank of Turkey (TSKB) will redeem, on April 22, $350mn and Isbank will repay, on April 30, $750mn.
For the Turkish real sector, the next scheduled eurobond redemption is scheduled for April 24, 2020 when Koc Holding will repay $750mn (XS0922615819) of debt which was already refinanced in March last year.
Also in 2020, Yasar Holding will redeem, on May 6, $172mn (XS1132450427) while glassmaker Sisecam will repay, on May 9, $300mn, already refinanced in March last year. Mersin Port will redeem on, August 12, $450mn ((XS0957598070), already refinanced in November.