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.
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.
|Turk Eximbank outstanding eurobonds|
|Eximbank||XS1496463297||5.375%||$500||Oct 24, 2016||Oct 24, 2023|
|Eximbank||XS1917720911||8.25%||$500||Jan 24, 2019||Jan 24, 2024|
|Eximbank||XS1814962582||6.125%||$500||May 3, 2018||May 3, 2024|
|Eximbank||XS2395576437||9.375%||$500||Jan 24, 2023||Jan 31, 2026|
|Eximbank||XS2332876106||5.75%||$750||Jun 29, 2021||Jul 6, 2026|
|Eximbank||XS2692231975||9.00%||500||Oct 25, 2023||Jan 28, 2027|
Table: Exim has five outstanding eurobonds.
So far this year, Turkish issuers have sold a total of $12bn worth of eurobonds across 12 papers.
|Major eurobond issues by Turkish issuers|
|Issuer||ISIN||Coupon||Volume (USD mn)||End of placement||Maturity||UST+||CDS+|
|Eximbank||XS2692231975||9.00%||500||Oct 25, 2023||Jan 28, 2027||341||496|
|We Soda (UK/Ciner)||US92943TAA16||9.50%||800||Sep 28, 2023||Oct 6, 2028||488||565|
|Arcelik (ARCLK)||XS2695038401||8.50%||400||Sep 25, 2023||Sep 25, 2028||393||467|
|TSKB (TSKB)||XS2678232781||9.375%||300||Sep 19, 2023||Oct 19, 2028||487||550|
|Yapi Kredi Bank (YKBNK)||XS2445343689||9.25%||500||Sep 13, 2023||Oct 16, 2028||486||550|
|Vakifbank (VAKBN)||XS2677517497||9.00%||750||Sep 12, 2023||Oct 10, 2028||464||527|
|Akbank (subordinated)||XS2611752317/XS2611752663/XS2611747234||9.60%||300||Jul 25, 2023||Jul 25, 2033(/28)||574||525|
|Treasury||US900123DJ66||9.125%||2,500||Apr 13, 2023||Jul 13, 2030||597||396|
|Treasury||US90014TAJ07||9.375%||2,250||Mar 8, 2023||Mar 14, 2029||517||393|
|Ziraat Bank||US90014TAH41||9.50%||500||Jan 25, 2023||Aug 1, 2026||566||410|
|Eximbank||XS2395576437||9.375%||500||Jan 24, 2023||Jan 31, 2026||552||387|
|Treasury||US900123DG28||9.375%||2,750||Jan 11, 2023||Jan 19, 2033||619||427|
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.
|Upcoming eurobond redemptions by major Turkish issuers|
|Isbank (ISCTR)||XS1003016018||7.85%||$400||Dec 10, 2013||Dec 10, 2023|
|Treasury||US900123CR91||7.25%||$2,000||Oct 23, 2018||Dec 23, 2023|
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.
|Awaited eurobond auctions by major Turkish issuers|
|Up to USDbn||Sold||Type|
|Oct 25, 2023||Ziraat Katilim Bankasi||SPK Approval||0.5||-||sukuk|
|Oct 5, 2023||Destek Yatirim Bankasi||SPK Approval||0.02||-||papers abroad|
|Sep 28, 2023||Mersin Liman||SPK Approval||0.6||-||eurobond|
|Sep 28, 2023||Kalibre Boru||SPK Approval||0.075||-||papers abroad|
|Sep 27, 2023||TAV (TAVHL)||SPK Application||0.75||-||papers abroad|
|Sep 20, 2023||Ford Otosan (FROTO)||SPK Approval||€0.5||-||papers abroad|
|Sep 14, 2023||Eximbank||SPK Approval||3||Oct 25, 2023||eurobond|
|Sep 14, 2023||Fiba Yenilenebilir Enerji Holding||SPK Approval||0.2||-||papers abroad|
|Sep 14, 2023||Akbank (AKBNK)||SPK Approval||2||-||papers abroad|
|Sep 14, 2023||Akbank (AKBNK)||SPK Approval||2||-||green|
|Sep 11, 2023||QNB Finansbank (QNBFB)||SPK Application||4||-||papers abroad|
|Sep 11, 2023||QNB Finansbank (QNBFB)||SPK Application||1||-||subordinated|
|Sep 7, 2023||Isbank (ISCTR)||SPK Approval||2||-||green|
|Aug 31, 2023||Vakifbank||SPK Approval||1||Sep 19, 2023||green|
|Aug 31, 2023||Nurol Holding||SPK Approval||0.5||-||papers abroad|
|Aug 28, 2023||QNB Finansbank (QNBFB)||Board mandate||0.3||-||subordinated|
|Aug 24, 2023||Garanti (GARAN)||SPK Approval||2||-||green|
|Aug 9, 2023||Destek Yatirim Bankasi||SPK Approval||0.015||-||papers abroad|
|Jul 27, 2023||Isbank (ISCTR)||SPK Approval||GBP 0.02||-||XS2658516732, Jul 29, 2024|
|Jul 20, 2023||Arcelik||SPK Approval||0.5||-||papers abroad|
|Jul 19, 2023||Garanti (GARAN)||GMTN Programme Renewal||6||-||papers abroad|
|Jun 20, 2023||Garanti (GARAN)||SPK Application||2||-||papers abroad|
|Jun 20, 2023||Garanti (GARAN)||SPK Application||€0.75||-||mortgage-backed|
|Jun 8, 2023||QNB Finansbank (QNBFB)||SPK Approval||0.6||-||papers abroad|
|Jun 8, 2023||QNB Finansbank (QNBFB)||SPK Approval||0.1||-||green|
|May 17, 2023||Destek Finans Faktoring||SPK Approval||0.00875||May 25, 2023||papers abroad|
|May 11, 2023||T.T.L. Tutun Sanayi||SPK Approval||0.01||-||papers abroad|
|Apr 27, 2023||Denizbank||SPK approval||3||-||papers abroad|
|Apr 27, 2023||Vakifbank VAKBN)||SPK Approval||€1||-||mortgage-backed|
|Apr 27, 2023||Yapi Kredi Bank (YKBNK)||SPK Approval||€0.25||-||mortgage-backed|
|Apr 27, 2023||Yapi Kredi Bank (YKBNK)||SPK approval||3||Sep 13, 2023||green|
|Apr 27, 2023||Yapi Kredi Bank (YKBNK)||SPK approval||7||-||papers abroad|
Table: Awaited eurobond sales by Turkish issuers.
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