Turkey’s top private lender Isbank sells $750mn of 10-year Basel III eurobonds, others awaited

Turkey’s top private lender Isbank sells $750mn of 10-year Basel III eurobonds, others awaited
By Akin Nazli in Belgrade January 22, 2020

Turkey’s largest private lender by assets, Isbank, on January 16 sold $750mn worth of subordinated bonds due January 2030 at a coupon rate of 7.75%, according to a stock exchange filing by the lender.

Basel III-compliant papers are callable at the end of the fifth year.

So far in 2020, three Turkish lenders have sold a combined $1.15bn worth of eurobonds.

Isbank’s sales followed a $750mn placement by a subsidiary, the Industrial Development Bank of Turkey (TSKB).

Major eurobond issues by Turkish issuers
Issuer ISIN Coupon Volume (USD mn) End of placement Maturity
Isbank XS2106022754 7.75% 750 Jan 16, 2020 Jan 22, 2030
TSKB   6.00% 400 Jan 15, 2020 Jan 22, 2025
Yapi Kredi Bank   6.05% 50 Jan 10, 2020 Dec 10, 2024
Fibabank XS2096028571 Floating 30 Dec 31, 2019 Dec 31, 2029
Turkcell XS1298711729 5.75% 10 Dec 20, 2019 Oct 15, 2025
Garanti Bank XS2094608580 5.25% 50 Dec 12, 2019 Dec 20, 2024
Mersin Port XS2071397850 5.375% 600 Nov 7, 2019 Nov 15, 2014
Treasury US900123CW86 5.60% 2500 Nov 6, 2019 Nov 14, 2024
Isbank XS2041003901 8.10% 50 Aug 7, 2019 Dec 3, 2029
Aktifbank XS2034164074 6.50% 40 Jul 31, 2019 Aug 1, 2029
Kuveyt Turk Bank XS2028862998 9.13% 200 Jul 2, 2019 Perpetual
Treasury US900123CV04 6.35% 2250 Jul 10, 2019 Aug 10, 2024
Vakifbank     150 Jun 25, 2019 Jul 16, 1905
Vakifbank XS1970705528 8.125% 600 Mar 21, 2019 Mar 28, 2024
Sisecam XS1961010987 6.95% 700 Mar 20, 2019 Mar 14, 2026
Treasury US900123CT57 7.625% 1000 Mar 26, 2019 Apr 26, 2029
Yapi Kredi Bank XS1958649854 8.25% 500 Mar 7, 2019 Oct 15, 2024
Koc Holding XS1961766596 6.50% 750 Mar 5, 2019 Mar 11, 2025
QNB Finansbank XS1959391019 6.875% 500 Feb 28, 2019 Sep 7, 2024
Yapi Kredi Bank XS1957348441 FRN 321.6 Feb 25, 2019 Nov 25, 2027
Turk Telekom XS1955059420 6.875% 500 Feb 21, 2019 Feb 28, 2025
Treasury (sukuk) XS1816199373 5.80% 2000 Feb 21, 2019 Feb 21, 2022
Treasury XS1843443356 4.63% EUR1.25bn Jan 31, 2019 Mar 31, 2025
Eximbank XS1917720911 8.25% 500 Jan 24, 2019 Jan 24, 2024
Treasury US900123CT57 7.625% 2000 Jan 16, 2019 Apr 26, 2029
source: cbonds, intellinews

Market players are awaiting a eurobond sale by the Turkish Treasury. The Treasury usually holds one in the first month of the new year.

Awaited eurobond auctions of major Turkish issuers
      Up to USDbn Sold Type
Jan-2020 Treasury Market expectation - -  
Jan 20, 2020 Garanti SPK Application 6 - debt instrument abroad
Sep 12, 2019 Vakifbank SPK Approval 5 -  
Dec 27, 2019 Isbank SPK Application 5 Jan 16, 2020  
Dec 16, 2019 Akbank Board authorisation 2 - subordinated
Nov-2019 Istanbul Municipality Treasury Application 0.5 -  
Nov 18, 2019 Yapi Kredi SPK Approval €0.5 - mortgage-backed
Nov 8, 2019 Vakifbank SPK Approval €1 - mortgage-backed
Oct 18, 2019 Turkish Airlines Mandated Lenders - - bond or ETTC
Oct 10, 2019 TWF Media report - -  

In a January 16 article entitled “Slam dunk week for CEEMEA bonds as NIPs barely on show”, Global Capital said: “It has been an extraordinary week in the CEEMEA new issue market where barely any deal was printed without a huge order book and a flat or negative new issue premium. Though a slew of expected sovereigns have so far stayed away, bankers said they expected them to step up to the plate soon.” 

The sheer uniformity of tight printing and clear heavy demand across the board were seen in all eight benchmark bonds printed last week in CEEMEA—from First Abu Dhabi BankVeonBahrain MumtalakatProsusTSKB, Isbank, Qatar National Bank and Phosagro, the publication noted.

This weekSaudi Arabia and Romania have benefited from the ‘dollar rains’. Ukraine is also in the market.

Turkey’s 5-year credit default swaps (CDS) fell below 250bp on January 15 and have remained in the 240s since then. A record level of 566bp was seen in September 2018 after the lira crisis.

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.

The next scheduled eurobond redemption by a Turkish issuer is scheduled for this week—on January 24, 2020 private lender Akbank will repay $500mn (XS1111101314).

Upcoming eurobond redemptions by major Turkish issuers
Issuer ISIN Coupon Volume (mn) Issuance Maturity Refinanced
Akbank XS1111101314 4.000% $500 Jan 23, 2015 Jan 24, 2020 -
Halkbank XS0882347072 3.875% $750 Feb 5, 2013 Feb 5, 2020 -
Vakifbank XS1175854923 6.950% $500 Feb 2, 2015 Feb 5, 2020 Early, 2025
TSKB XS1219733752 5.125% $350 Apr 22, 2015 Apr 22, 2020 January 16, 2020
Koc Holding US49989AAA79 3.500% $750 Apr 24, 2013 Apr 24, 2020 Mar 5, 2019
Isbank XS1121459074 5.000% $750 Oct 30, 2014 Apr 30, 2020 Jan 16, 2020
Yasar Holding XS1132450427 8.875% $172 Nov 6, 2014 May 6, 2020 -
Sisecam US90016AAA88 4.250% $300 May 9, 2013 May 9, 2020 Mar 20, 2019
Treasury XS0503454166 5.125% €2,000 Jul 2, 1905 May 18, 2020 -
Treasury US900123AX87 7.000% $2,000 Jun 2, 2005 Jun 5, 2020 -
Mersin Port XS0957598070 5.875% $450 Aug 12, 2013 Aug 12, 2020 Nov 7, 2019
Treasury JP579200AHQ2 1.810% JPY60bn Dec 1, 2017 Dec 7, 2020 -
Treasury JP579200ABF8 1.870% JPY180bn Mar 11, 2011 Mar 18, 2021 -
Treasury US900123BH29 5.625% $2,000 Jul 2, 1905 Mar 30, 2021 -
Treasury XS1303467077 4.251% $1,000 Jun 1, 2016 Jun 8, 2021 -

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