Turkey’s Treasury has sold $2.5bn of a sukuk paper (XS2689091846) due January 2029 at a coupon rate of 8.51% (priced at 100.00), the country's finance ministry said on November 8.

Emirates NBD Capital Limited, HSBC (London/HSBA), JPMorgan (New York/JPM), Kuwait Finance House (Kuwait/KFH)  and Qatar National Bank (QNB) acted as intermediaries in the deal.

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.

In October 2022, the Treasury sold $2.5bn of a three-year sukuk paper (XS2523929474) at a coupon rate of 9.76%

On November 5, Ziraat Katilim Varlik Kiralama sold $500mn of a debut sukuk paper (XS2699906512) due November 2026 at a coupon rate of 9.375%.

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.

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.

On December 10, Isbank (ISCTR) is to redeem a $400mn paper (XS1003016018), which pays a 7.85% coupon.

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.

Table: Awaited eurobond sales by Turkish issuers.