Turkey’s dual Eurobond issue draws strong interest

Turkey borrowed a total $2.25 billion in its latest dollar-denominated dual-tranche bond issuance, bringing the amount of funds raised from international capital markets in 2021 to $10 billion, the Treasury said on Tuesday.


The latest issuance consisted of a $750 million tap of an October 2028 bond with a yield to investor of 5.70% and $1.5 billion of a September 2033 bond with a yield to investors of 6.50%, it said.


The offering attracted an orderbook of more than 4 times the actual issue size, with 37% of the issue sold to investors in Britain, 31% in the United States and 16% in other European countries.


BlueBay Asset Mgmt. Company strategist Tim  Ash  commented “Goes to show investors still have faith in the Turkey credit story – public finances are still in decent shape, and proven willingness to pay is high. Think long term, looking thru the trysts in monetary policy, investors still like Turkey risk. They want to buy, only nervousness over monetary and exchange rate policy and the unpredictability of Erdogan hold them back”.


Turkey’s central budget generating a monthly surplus of TL28 bn or $3.30 bn helped to move the bond offering.  In general the economy is slowing, but still witnessing rapid consumption growth.  The buoyancy of budget revenues lowers default risk.


A fairly stable currency, too, helped Treasury sell its Eurobonds, dollar/TL moved very little in value since June, currently hovering at 8.44.


Finally, Treasury tapped the market at a time when the hunt for yield is in progress.   It  would have been difficult to place Eurobonds, if and when Fed announces the dreaded taper.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.