Four Turkish issuers raised a combined sum of $3.85bn via eurobond sales in three days from June 23 and June 25. The flurry suggests a re-opening of the market for Turks.

After Turkey's incumbent "orthodox" finance minister Mehmet Simsek was appointed in June 2023 (following the May national elections and a low-interest period of several years), Turks tapped $48bn from the eurobond market from September 2023 to February 2025.

Last year brought records in all kinds of categories. More than a dozen debut issuers entered the market. Consecutive tap issues were observed. (See the full list here.)

Mid-March this year brought the jailing of Istanbul mayor and presidential candidate Ekrem Imamoglu. Next, Donald Trump shook the global markets with his big tariff announcements at the beginning of April, then Israel attacked Iran in June.

Turks stayed back from the market in March and April. In May, the Treasury and debut seller Cimko tested the waters. However, June brought the outbreak of the so-called "12-day war" between Israel and Iran.

Eximbank's three-year paper

On June 23, government-run Turk Eximbank sold $500mn of a three-year paper (XS3034601446) at a coupon rate of 6.875% and a yield to investor of 7% (priced at 99.665).

Abu Dhabi Commercial Bank PJSC (Abu Dhabi/ADCB), BBVA (Madrid/BBVA) Securities Inc., Citibank (Citigroup/New York/C) Global Markets Limited, Deutsche Bank (Frankfurt/DBK) AG, Emirates NBD Capital Limited, First Abu Dhabi (FAB) Bank PJSC (Abu Dhabi/FAB), ING Bank (Amsterdam/INGA) N.V., Mitsubishi UFJ Financial Group (MUFG Bank/Tokyo/8306) Securities EMEA Plc., SMBC (Sumitomo Mitsui Banking Corporation/Tokyo/8316) Nikko, Societe Generale (Paris/GLE) and Standard Chartered Bank (London/STAN) acted as intermediaries in the deal.

Eximbank has a BB-/Stable rating from Fitch Ratings and a B1/Positive from Moody’s Investors Service.

In January 2024, Eximbank sold a $500mn five-year paper at a 7.50% coupon and 7.75% yield.

The spread over US Treasury papers fell to 320bp on June 23 from 375bp in January 2024.

Eximbank currently has five outstanding eurobonds with a combined nominal value of $2.75bn. (See the papers here).

Treasury's $2.5bn sukuk

On June 24, Turkey’s Treasury sold a $2.5bn sukuk (XS3072231809) at a coupon rate of 6.75% and a yield to investor of 6.85% (priced at 99.583).

Dubai Islamic Bank (Dubai/DIB), ENBD (Emirates NBD), HSBC (London/HSBA), Kuwait Finance House (Kuwait/KFH) and Standard Chartered acted as intermediaries in the deal.

In the previous auction held on May 21, the Treasury sold $2bn of 7-year eurobonds (US900123DQ00) at a coupon rate of 7.25% and a yield to investor of 7.45% (priced at 98.924).

The spread over the US Treasuries fell to 300bp on June 24 from 308bp on May 21 but compared higher to the 288bp seen in February.

In the previous sukuk auction held in November, the Treasury sold $2.5bn of a 5.5-year paper (XS2900389870) at a coupon rate of 6.50% and a yield to investor of 6.55% (priced at 99.782). The spread over the US Treasuries stood at 225bp.

Turkey currently has a BB-/Stable rating (at three notches below investment grade) from Fitch Ratings, a B1/Positive (at four notches below investment grade) from Moody’s Investors Service and a BB-/Stable (at three notches below investment grade) from S&P Global Ratings.

Turkey’s CDS is hovering around the 300-level, while the yield on the Turkish government’s 10-year eurobonds remains above the 7%-level.

So far in 2025, the Treasury has sold three papers worth $7bn. It also redeemed four papers worth $8bn. It will redeem two more papers, a $2bn paper (US900123CZ18) in October and a $2.5bn sukuk paper (XS2523929474) in November.

Currently, the Treasury has 41 outstanding papers with a combined nominal value of $96bn.

Garanti, Tier-II

On June 24, Garanti BBVA (GARAN) sold a $500mn 10-year (XS3106498051) subordinated Tier II paper at a coupon rate of 8.125% (priced at 99.451).

The paper is callable at the end of the fifth year.

Banco Bilbao Vizcaya Argentaria (BBVA) S.A., BofA Securities Inc (a unit of Bank of America (New York/BAC), JPMorgan (New York/JPM) Securities plc, BNP Paribas (Paris/BNP), Emirates NBD Bank PJSC, First Abu Dhabi Bank,  MUFG Securities EMEA plc and Standard Chartered Bank acted as intermediaries in the deal.

Garanti has a BB-/Stable rating from Fitch Ratings and a Ba3/Positive from Moody’s Investors Service.

Currently, Garanti has four outstanding eurobonds with a combined nominal value of $2.4bn. All of them are Tier II papers. (See the papers here).

In November, Garanti sold $750mn of subordinated (Tier II) 10-year eurobonds at a coupon rate of 8.125% (priced at 99.985).

The spread over US Treasuries rose to 383bp from 370bp in November.

In November, the lender also launched a cash tender offer for its outstanding Tier II paper (XS1617531063/US900148AE73) due 2027. It bought back $134mn of papers. A total of $616mn worth of papers remain outstanding.

In 2022, Garanti opted not to call the $750mn paper in question, sold on May 23, 2017.

Garanti’s decision became an issue since the market norm for Turkish banks has generally been to call Tier 2 debt after five years.

A few peers followed Garanti’s path. However, the situation did not trigger any substantial problems despite some concerns that generated headlines in the financial media.

In the latest subordinated eurobond sale by a Turkish lender held in February, Akbank (AKBNK) sold $500mn of sustainable 10-year Tier II eurobonds (XS3013974533) at a yield and coupon rate of 7.875% (priced at par).

TSKB, five-year

On June 25, the Industrial Development Bank of Turkey (TSKB) sold a $350mn five-year paper (XS3102781658) at a coupon rate of 7.375% and a yield of 7.5% (priced at 99.487).

Abu Dhabi Commercial Bank, BNP Paribas, Citi, Emirates NBD, ING, JPMorgan, SMBC and Standard Chartered Bank acted as intermediaries in the deal.

TSKB has a B+/Positive rating from Fitch Ratings and a B1/Positive from Moody’s Investors Service.

In October, the lender sold $350mn of five-year eurobonds (XS2919891361) at a coupon rate of 7.125% (priced at 100.00).

The spread over US Treasuries rose to 350bp on June 25 from 322 in October.

Currently, TSKB has five outstanding eurobonds with a combined nominal value of $1.65bn. (See the papers here).

17 papers in the year to date

Turkish issuers have raised $12.85bn so far this year via 17 papers, including two tap issues. (See the full list of auctions here).

In 2025, Turkish eurobond issuers are to redeem 15 papers worth $17bn. Tender calls, tender offers and buyback programmes have been executed for five papers.

So far, $11bn worth of nine papers have been redeemed. During October and December, the remaining four papers will be redeemed.

During the year, the Treasury is to redeem six papers worth $12bn. For three papers, the Treasury has held tender offers. So far, it has redeemed $8bn worth of four papers.

(See the full list of upcoming redemptions here).

In 2024, Turkish eurobond sellers raised $33bn from 46 papers, setting an annual record, while redeeming $16bn worth of 19 papers.

In 2024, the Treasury sold five papers worth $13bn. It also redeemed five papers worth $9bn.