The Turkish Treasury has mandated Citi, Deutsche Bank, JP Morgan, and Societe Generale to sell USD-denominated dual-tranche eurobonds due 2025 and 2030, the finance ministry said on February 6.

Initial price guidance for the 5-year paper stood at around 4.65% and for the 10-year paper at around 5.65%, Reuters quoted unnamed bankers as saying.

It is expected that the auction will be completed on February 6, they added.

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

Market players were awaiting a eurobond sale by the Turkish Treasury that traditionally arrives in January, but the auction has instead been scheduled for the start of February.

Awaited eurobond auctions by major Turkish issuers
			Up to USDbn	Sold	Type
Feb 5, 2020	Treasury	Bookbuilding	-	-	eurobond
Jan 29, 2020	Vakifbank	Bookbuilding	-	Jan 29, 2020	eurobond
Jan 23, 2020	Akbank	SPK Approval	2	-	subordinated
Jan 23, 2020	Ziraat	SPK Approval	4	-	debt instrument
Jan 20, 2020	Garanti	SPK Application	6	-	debt instrument
Dec 27, 2019	Isbank	SPK Application	5	Jan 16, 2020
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	-	-

Turkey’s 5-year credit default swaps (CDS) have been below 240bp since last month, marking a sharp decline from levels above 410bp seen last October. A record 566bp was recorded 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.

Fitch’s rating review releases for Turkey are expected on February 21 and August 21. Moody’s reviews are scheduled for June 5 and December 4 while S&P on January 31 affirmed its Turkey rating. It is set to release its last scheduled review for this year on July 24.

Turkish Treasury's outstanding eurobonds
Issuance	Maturity	Year	Currency	Face (mn)	Face ($mn)	Coupon (%)	Type	ISIN
Apr 20, 2010	May 18, 2020	10.1	EUR	1,500	1,651	5.125	Bond	XS0503454166
Nov 12, 2010	May 18, 2020	9.5	EUR	500	550	5.125	Re-open	XS0503454166
Jun 2, 2005	Jun 5, 2020	15	USD	1,250	1,250	7.000	Bond	US900123AX87
Feb 23, 2007	Jun 5, 2020	13.3	USD	750	750	7.000	Re-open	US900123AX87
Dec 1, 2017	Dec 7, 2020	3	JPY	60,000	548	1.810	Bond	JP579200AHQ2
Mar 11, 2011	Mar 18, 2021	10	JPY	180,000	1,643	1.870	Bond	JP579200ABF8
Mar 11, 2010	Mar 30, 2021	11.1	USD	1,000	1,000	5.625	Bond	US900123BH29
Aug 5, 2010	Mar 30, 2021	10.7	USD	1,000	1,000	5.625	Re-open	US900123BH29
Jun 1, 2016	Jun 8, 2021	5	USD	1,000	1,000	4.251	Sukuk	XS1303467077
Nov 5, 2013	Nov 12, 2021	8	EUR	1,250	1,376	4.350	Bond	XS0993155398
Feb 13, 2019	Feb 21, 2022	3	USD	2,000	2,000	5.800	Sukuk	XS1816199373
Mar 8, 2012	Mar 15, 2022	10	JPY	90,000	822	1.470	Bond	JP579200ACF6
Oct 17, 2011	Mar 25, 2022	10.4	USD	1,000	1,000	5.125	Bond	US900123BY51
Jan 18, 2012	Sep 26, 2022	10.7	USD	1,500	1,500	6.250	Bond	US900123BZ27
Feb 16, 2012	Sep 26, 2022	10.6	USD	1,000	1,000	6.250	Re-open	US900123BZ27
Jan 8, 2013	Mar 23, 2023	10.2	USD	1,500	1,500	3.250	Bond	US900123CA66
Mar 30, 2017	Apr 6, 2023	6	USD	1,250	1,250	5.004	Sukuk	XS1586385178
Apr 8, 2014	Apr 11, 2023	9	EUR	1,000	1,101	4.125	Bond	XS1057340009
Oct 16, 2018	Dec 23, 2023	5.2	USD	2,000	2,000	7.250	Bond	US900123CR91
Jan 22, 2014	Mar 22, 2024	10.2	USD	2,500	2,500	5.750	Bond	US900123CF53
Jul 2, 2019	Aug 10, 2024	5.1	USD	2,250	2,250	6.350	Bond	US900123CV04
Sep 17, 2014	Sep 25, 2024	10	JPY	100,000	913	1.050	Bond	JP579200AEM8
Nov 6, 2019	Nov 14, 2024	5	USD	2,500	2,500	5.600	Bond	US900123CW86
Nov 18, 2014	Nov 25, 2024	10	USD	1,000	1,000	4.489	Sukuk	XS1141043296
Jan 13, 2005	Feb 5, 2025	20.1	USD	2,000	2,000	7.375	Bond	US900123AW05
Nov 1, 2006	Feb 5, 2025	18.3	USD	1,250	1,250	7.375	Re-open	US900123AW05
Jan 24, 2019	Mar 31, 2025	6.2	EUR	1,250	1,376	4.625	Bond	XS1843443356
Jun 7, 2017	Jun 14, 2025	8	EUR	1,000	1,101	3.250	Bond	XS1629918415
Nov 7, 2018	Feb 16, 2026	7.3	EUR	1,500	1,651	5.200	Bond	XS1909184753
Apr 8, 2015	Apr 14, 2026	11	USD	1,500	1,500	4.250	Bond	US900123CJ75
Mar 2, 2016	Oct 9, 2026	10.6	USD	1,500	1,500	4.875	Bond	US900123CK49
Oct 20, 2016	Oct 9, 2026	10	USD	1,500	1,500	4.875	Re-open	US900123CK49
Jan 18, 2017	Mar 25, 2027	10.2	USD	2,000	2,000	6.000	Bond	US900123CL22
Feb 23, 2017	Mar 25, 2027	10.1	USD	1,250	1,250	6.000	Re-open	US900123CL22
Jan 9, 2018	Feb 17, 2028	10.1	USD	2,000	2,000	5.125	Bond	US900123CP36
Apr 16, 2018	Oct 24, 2028	10.5	USD	2,000	2,000	6.125	Bond	US900123CQ19
Jan 9, 2019	Apr 26, 2029	10.3	USD	2,000	2,000	7.625	Bond	US900123CT57
Mar 26, 2019	Apr 26, 2029	10.1	USD	1,000	1,000	7.625	Re-open	US900123CT57
Jan 10, 2000	Jan 15, 2030	30	USD	1,500	1,500	11.875	Bond	US900123AL40
Jan 30, 2013	Feb 7, 2033	20	JPY	18,400	168	2.680	Bond	JP579200ADE7
Jan 7, 2004	Feb 14, 2034	30.1	USD	1,500	1,500	8.000	Bond	US900123AT75
Jan 4, 2006	Mar 17, 2036	30.2	USD	1,500	1,500	6.875	Bond	US900123AY60
Nov 14, 2006	Mar 17, 2036	29.3	USD	750	750	6.875	Re-open	US900123AY60
Jan 17, 2007	Mar 17, 2036	29.2	USD	500	500	6.875	Re-open	US900123AY60
Feb 27, 2008	Mar 5, 2038	30	USD	1,000	1,000	7.250	Bond	US900123BB58
Jan 5, 2010	May 30, 2040	30.4	USD	2,000	2,000	6.750	Bond	US900123BG46
Jan 5, 2011	Jan 14, 2041	30	USD	1,000	1,000	6.000	Bond	US900123BJ84
Jun 26, 2012	Jan 14, 2041	28.6	USD	1,000	1,000	6.000	Re-open	US900123BJ84
Dec 11, 2012	Jan 14, 2041	28.1	USD	1,000	1,000	6.000	Re-open	US900123BJ84
Apr 9, 2013	Apr 16, 2043	30	USD	1,500	1,500	4.875	Bond	US900123CB40
Jan 13, 2015	Apr 16, 2043	28.3	USD	1,500	1,500	4.875	Re-open	US900123CB40
Feb 12, 2014	Feb 17, 2045	31	USD	1,500	1,500	6.625	Bond	US900123CG37
May 4, 2016	Feb 17, 2045	28.8	USD	1,500	1,500	6.625	Re-open	US900123CG37
May 4, 2017	May 11, 2047	30	USD	1,750	1,750	5.750	Bond	US900123CM05
Sep 13, 2017	May 11, 2047	29.7	USD	1,750	1,750	5.750	Re-open	US900123CM05
source: treasury

To date in 2020, four Turkish lenders have sold a combined $1.9bn worth of eurobonds. Coupon rates have shown significant declines compared to last year because of the latest wave of collective monetary easing.

Major eurobond issues by Turkish issuers
Issuer	ISIN	Coupon	Volume (USD mn)	End of placement	Maturity
Vakifbank	XS2112797290	5.25%	750	Jan 29, 2020	Feb 5, 2025
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

Coronavirus fears have been weighing on some investors’ minds, but the mood among EM investors was buoyant as EM debt inflows reached $29.7bn in January, Global Capital reported on February 5.

By January 30, CEEMEA issuance had hit $28.4bn from 42 deals, beating 2018’s high of $24.3bn, and 47% higher than the $19.3bn sold in 2019, the publication reported on January 30 in a story entitled “Record-breaking Jan for CEEMEA bonds, secondaries strong”.

For emerging markets globally, the numbers were similarly spectacular with $108.2bn issued this year versus $62.8bn in the same period in 2019.

New issues in the secondary market have mostly performed strongly, and high redemption volumes this year will have investors flush with cash, Global Capital also noted.

On February 5, Turkish government-run Halkbank, which is in trouble with the US judiciary for allegedly engaging in a conspiracy to evade Iran sanctions, said in a stock exchange filing that it had successfully redeemed $750mn worth of 7-year eurobonds.

On February 5, government-run Vakifbank said in a stock exchange filing that it received the proceeds from the sale of $750mn worth of 5-year eurobonds that will pay a 5.25% coupon.

In March 2019, Vakifbank sold $600mn worth of a 5-year paper at 8.125%.

The note was printed on January 5 at the tight end of initial price guidance, at a price of 99.458, Global Capital reported on January 30 in a story entitled “Vakifbank opens wider after tight print”, noting that the senior unsecured deal started at 5.875%-6.0% before being revised to 5.625% area and then 5.375%-5.50% thanks to a book that reached higher than $4.3bn at its peak.

However, the note was seen below re-offer in London’s secondary market on the morning of January 30.

On February 3, Vakifbank redeemed $500mn worth of 10-year Basel 3-compliant Tier II subordinated eurobonds after exercising its option to recall the paper at the end of the fifth year.

The next scheduled eurobond redemption by a Turkish issuer is set for April 22 when the Industrial Development Bank of Turkey (TSKB) will redeem $350mn of 5-year paper, already refinanced last month.

So far, all Turkish issuers, except Yasar Holding which will repay on May 6 $172mn of a 6-year paper, have refinanced their scheduled eurobond redemptions for 2020.

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	2010	May 18, 2020	-
Treasury	US900123AX87	7.000%	$2,000	2005-2007	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	-
Eximbank	XS1345632811	5.375%	$500		Feb 8, 2021	-
Halkbank	XS1188073081	4.750%	$500		Feb 11, 2021	-
Treasury	JP579200ABF8	1.870%	JPY180bn	Mar 11, 2011	Mar 18, 2021	-
Treasury	US900123BH29	5.625%	$2,000	2010	Mar 30, 2021	-
Garanti	USM8931TAA71	6.250%	$500		Apr 20, 2021
Ziraat	XS1223394914	4.750%	$500	Apr, 2016	Apr 29, 2021	-
TSKB	XS1412393172	4.875%	$300	May 18, 2016	May 18, 2021	-
Treasury	XS1303467077	4.251%	$1,000	Jun 1, 2016	Jun 8, 2021	-
Treasury	XS0993155398	4.350%	€1,250	Nov 5, 2013	Nov 12, 2021	-