The Turkish Treasury has raised €1.25bn from a EUR-denominated eurobond due March 2025 with a coupon rate of 4.625% and a yield to the investor of 4.75%, it said on January 25 in a written statement.

Initial price guidance on Turkey’s new euro-denominated bond yield was set at about 5%, unnamed banking sources told Reuters on January 24.

The spread over market rates sharply declined to 446bp over the mid-swaps (MP). However, that was still fairly high compared to the 336.8bp seen at the last auction held in April last year before the August currency crash.

The amount of funds Turkey has raised from the international capital markets in 2019 has reached $3.4bn.

On January 10, the Treasury said it had raised $2bn from a USD-denominated eurobond due April 2029 with a coupon rate of 7.625% and a yield to the investor of 7.68%. The spread over the US Treasury yield reached 497bp at the first eurobond sale of 2019.

Turkey targeting $8bn from global markets
Turkey plans to raise the equivalent of $8bn of external funding in 2019 through bond issues on global capital markets. It raised $7.7bn in financing from such markets in 2018, as opposed to its $6.5bn annual target. Turkey raised $9.1bn from international markets in 2017 versus the planned $6bn.

Turkey is rated BB/negative by Fitch and Ba3/negative by Moody’s while S&P’s unsolicited rating for Turkey is B+/stable, according to a January 7-dated investor presentation on the Turkish Treasury’s revamped website.

Turkey is planning to raise less cash through local-currency debt sales than it redeems in 2019 for the first time since 2016, according to the Treasury’s 2019 borrowing strategy.

The country plans to borrow TRY153.9bn from the domestic market and redeem TRY164.6bn. That would take the debt rollover ratio to 93.5%, down from 107% in 2018, and 126% in 2017.

Meanwhile, local lenders are also moving to tap international markets to overcome the ongoing liquidity crisis due to the falling debt roll-over ratios coupled with rising loan restructurings amid Turkey’s economic difficulties.

Is Bankasi has received approval from the Capital Markets Board (SPK) to issue up to $5bn worth of eurobonds abroad, according to the latest weekly SPK bulletin released on January 24.

SPK has also approved public lender Ziraat Bankasi’s application to issue up to TRY17.5bn worth of domestic bonds through private placements to qualified investors. Ziraat Bankasi will issue up to TRY12.5bn worth of regular bonds, up to TRY2.5bn worth of structured asset-backed papers and up to TRY2.5bn worth of gold bonds.

Turkish Treasury's 2019 eurobond issues
Issue Date	Currency	Size	Maturity	CouponRate (%)	Price (%)	Yield to Investor (%)	Yield to Investor (Spread)	Euro Cost (%)
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 2018 eurobond Issues
17.01.2018	USD	2bn	17.02.2028	5.125	99.411	5.20	UST + 266.7 bp
24.04.2018	USD	2bn	24.10.2028	6.125	99.427	6.20	UST + 336.8 bp
23.10.2018	USD	2bn	23.12.2023	7.25	98.917	7.50	UST + 447.5 bp
14.11.2018	EUR	1.5bn	16.02.2026	5.2	99.73	5.25	MS + 456.4 bp
Turkish Treasury's 2017 eurobond Issues
23.01.2017	USD	2bn	25.03.2027	6	99	6.15	UST + 375.7 bp
23.02.2017	USD	1.25bn	25.03.2027	6	103	5.65	UST + 320.5 bp
11.05.2017	USD	1.75bn	11.05.2047	5.75	98	5.875	UST + 286.7 bp
14.06.2017	EUR	1bn	14.06.2025	3.25	99	3.377	MS + 285 bp
13.09.2017	USD	1.75bn	11.05.2047	5.75	101	5.70	UST + 300.5 bp
Turkish Treasury's 2017 lease certificate issues on international markets
06.04.2017	USD	1.25bn	06.04.2023	5	100	5	MS + 285 bp
source: Turkish Treasury