Denizbank, Emirates NBD’s Turkish private lending unit, has decided to launch a process to sell up to $3bn worth of eurobonds, with up to $1bn of paper possibly to be in the covered bond form, according to a stock exchange filing made by the subsidiary.

In the latest eurobond sale made by a Turkish issuer, the Treasury on February 7 sold $2bn of 5-year and $2bn of 10-year eurobonds at yields of 4.25% and 5.45%, respectively.

On February 26, the Turkish Treasury filed with the US Securities and Exchange Commission for debt securities of up to $10bn.

To date in 2020, Turkish issuers have sold a combined $5.9bn worth of eurobonds. Coupon rates have shown significant declines compared to last year because of the latest wave of collective monetary easing.

Turkey, however, is seen by many observers as in danger of falling apart on all fronts and Turkish issuers’ outstanding eurobonds have been hit by a series of ongoing crises.

Turkey’s 5-year credit default swaps (CDS) saw 375bp on February 28, after falling below 240bp earlier in February. The figure stood at 410bp last October, while a record 566bp was seen 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 second rating review release for Turkey is expected on August 21. Moody’s reviews are scheduled for June 5 and December 4, while S&P is set to release its second and last scheduled review for this year on July 24.

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 on May 6 repay $172mn of a 6-year paper, have refinanced their scheduled Eurobond redemptions for 2020.

 

Awaited eurobond auctions by major Turkish issuers
			Up to USDbn	Sold	Type
Feb 26, 2020	Denizbank	Board decision	3	-	debt instrument
Feb 20, 2020	Yapi Kredi	Board mandate	7	-	debt instrument
Feb 20, 2020	Sasa	Mandated Lender	€0.15	-	covered
Feb 6, 2020	Garanti BBVA	SPK Approval	6	-	eurobond
Feb 6, 2020	Net Holding	SPK Approval	0.3	-	eurobond
Feb 5, 2020	Treasury	Bookbuilding	-	Feb 6, 2020	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
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	-	-