Government-run Turk Eximbank has sold $500mn of eurobonds (XS2692231975) due January 2027 at a coupon rate of 9% and a yield to investor of 9.125% (priced at 99.586), the lender said on October 25.

Bank ABC (Arab Banking Corporation/Bahrain/ABC) International Bank plc, Citibank (Citigroup/New York/C), Emirates NBD Capital Limited, Industrial & Commercial Bank of China (ICBC/Shanghai/601398), ING Bank (Amsterdam/INGA), Mitsubishi UFJ Financial Group (MUFG Bank/Tokyo/8306) Securities EMEA, SMBC (Sumitomo Mitsui Banking Corporation/Tokyo/8316) Nikko, Standard Chartered Bank (London/STAN) and Societe Generale (Paris/GLE) acted as bookbuilders in the deal.

Turkey’s five-year credit default swaps (CDS) have once again moved above the 400-level, while the yield on the Turkish government’s 10-year eurobonds has surpassed the 9% level.

In May, unnamed sources told Bloomberg that Turkey’s central bank asked some local lenders to buy the country’s dollar bonds to prevent a CDS spike.

Looking at the global markets, sentiment remains turbulence-free, despite the latest rise in US Treasury yields (sailing through the 6%s across the curve) that was followed by the rise in the USD Index (DXY) (through the 107-level from the 99s seen in July).

As a result, the USD/TRY has been heading north again. On September 21, the pair once again broke through the horizontal barrier set at the 27.00-level. The latest record high, registered on October 25, is 28.3807.

Turkey’s government has lately been again applying a ‘five/10 kurus (pronounced as kurush, it is the Turkish cent) devaluation per day policy’ in the struggle to stop the slide. As of October 10, the new daily trench was being dug around the 28.15-level.

In line with local peers, Eximbank, the 10th largest bank in Turkey with Turkish lira (TRY) 464bn ($16bn) 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.

On October 24, Turk Eximbank redeemed a $500mn paper (XS1496463297), which paid a 5.375% coupon.

On January 24, the lender is to redeem another $500mn paper (XS1917720911), which pays an 8.25% coupon.

Table: Exim has five outstanding eurobonds.

In September, London-based We Soda, a unit of Istanbul-based Ciner Holding (owned by Turgay Ciner), sold $800mn worth of 5-year eurobonds (US92943TAA16) at a coupon rate of 9.50%.

So far this year, Turkish issuers have sold a total of $12bn worth of eurobonds across 12 papers.

Table: Major eurobond sales by Turkish issuers.

In 2022, Turkish borrowers sold $12bn of eurobonds across eight tenders. The Treasury was the dominant player, raising $11bn in five tenders. It redeemed $8bn on four papers during the year.

In 2023, Turkish eurobond sellers are supposed to redeem a total of $11bn across 15 papers. In the year to date, $9bn across 13 papers has been redeemed.

On December 10, Isbank (ISCTR) is to redeem a $400mn paper (XS1003016018), which pays a 7.85% coupon.

Table: Upcoming redemptions by Turkish issuers.

On July 11, port operator Mersin Uluslararasi Liman Isletmeciligi (Mersin Port/MIP) said that it was closely monitoring opportunities to refinance its $600mn of outstanding 5-year eurobonds (XS2071397850) due November 2024, callable at par in November 2023.

In April, Albaraka Turk (ALBRK), a unit of Al Baraka Banking Group (Bahrain/BARKA), launched a tender offer for its $250mn subordinated (Basel III-compliant Tier II) sukuk paper (XS1301525207), due 2025.

Turkey’s finance minister Mehmet Simsek has, meanwhile, been talking about selling bonds worth $8.5bn for earthquake recovery efforts and $3bn for export credits to the UAE. It is unknown what type of papers will be sold and when.

Table: Awaited eurobond sales by Turkish issuers.