Senior management of Turkey’s leading low-cost carrier Pegasus Airlines (PGSUS) have since April 19 been attending virtual investor meetings to test market conditions for a sale of its first ever eurobonds, according to a stock exchange filing made by the company.

Goldman Sachs and Merrill Lynch are arranging the meetings.

The eurobond move is set to be completed following the receipt of the tranche issuance document from the Capital Markets Board of Turkey (SPK).

Pegasus has a limit of up to $750mn approved by the SPK.

On April 19, Fitch Ratings assigned a first-time rating of BB-/Negative, three notches below investment grade in line with Turkey’s sovereign rating, to Pegasus. Standard & Poor’s has assigned a first-time rating of B/Stable, five notches below investment grade and one notch below Turkey’s sovereign rating.

Both rating agencies suggested that Pegasus was aiming to sell $500mn in eurobonds.

The outcome of the deal will demonstrate the level of market appetite for Turkish papers in the wake of the fresh economic turmoil that hit the country in the wake of the shock firing of the central bank governor by presidential decree on March 19, according to Global Capital.

Pegasus has been seeking a maturity of either 3.5 years or a five-year non-call three-year structure, the publication noted.

On April 20, Garanti BBVA redeemed $500mn of eurobonds and, on April 29, Ziraat Bank will also redeem $500mn of eurobonds.

On January 26, in the last eurobond auction held by a Turkish borrower, government-run Ziraat Bank sold $600mn of 5-year eurobonds at a coupon of 5.375%.

On April 20, Pegasus said in a stock exchange filing that it resolved the financing of four Airbus A320neo and one Airbus A321neo aircraft scheduled for delivery between March and December 2021, as part of its 2012 Airbus Order.

The financing method and terms and lenders will be determined by the company management for all or different parts of the incoming batch based on a request for proposal (RFP) process and changes in the company's financing obligations that will be released in upcoming financial reports.

In 2012, Pegasus placed a 100-aircraft order with Airbus and later converted it into firm orders, covering a firm purchase commitment for 42 Airbus A320neo and 58 Airbus A321neo aircraft.

April is witnessing hoped for recoveries in the Turkish aviation industry, hindered by the reintroduction of partial coronavirus lockdowns in Turkey.

Turkey’s private airlines have been seeking state help to restructure Turkish lira (TRY) 20bn ($2.5bn) of loans.