Turkey currently has a B/Stable rating, five notches below investment grade, from Fitch Ratings, a B3/Stable, six notches below investment grade, from Moody’s Investors Service and a B/Stable, five notches below investment grade, from S&P.
Looking at the global markets, there is no turbulence of note impacting sentiment. Turkey’s five-year credit default swaps (CDS) remain below the 400-level, while the yield on the Turkish government’s 10-year eurobonds remains below the 9%-level.
The USD/TRY rate is, meanwhile, still heading north. On September 21, the pair once again broke through the horizontal barrier set at the 27.00-level. The latest record high, registered on November 7, is 28.6424.
The Turkish government’s ‘five/10 kurus (Turkish cents, pronounced as kurush) devaluation per day policy’ in the struggle to stop the slide is still in place. As of November 8, the latest daily trench was being dug around the 28.55-level, up 3% m/m and 55% y/y.
Following the local elections to be held in March, Turkey’s policy rate will reach its peak. The finance industry will then be welcomed in for the rate-cutting party.
So far this year, Turkish issuers have sold a total of $15bn worth of eurobonds across 14 papers.
|Major eurobond issues by Turkish issuers|
|Issuer||ISIN||Coupon||Volume (USD mn)||End of placement||Maturity||UST+||CDS+|
|Treasury (sukuk)||XS2689091846||8.51%||2,500||Nov 7, 2023||Jan 14, 2029||394||491|
|Ziraat Katilim (sukuk)||XS2699906512||9.375%||500||Nov 6, 2023||Nov 12, 2026||476||570|
|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||XS2581381634||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.
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|
|Nov 2, 2023||Aktifbank||SPK Approval||TRY0.75||-||papers abroad|
|Oct 27, 2023||Pasha Yatirim Bankasi||SPK Approval||0.025||-||papers abroad|
|Oct 25, 2023||Ziraat Katilim Bankasi||SPK Approval||0.5||Nov 6, 2023||sukuk|
|Oct 18, 2023||QNB Finansbank (QNBFB)||SPK Application||4||-||papers abroad|
|Oct 18, 2023||QNB Finansbank (QNBFB)||SPK Application||1||-||subordinated|
|Oct 9, 2023||QNB Finansbank (QNBFB)||Board mandate||0.3||-||subordinated|
|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 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 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|
Table: Awaited eurobond sales by Turkish issuers.
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