The Turkish Treasury will on November 7 redeem $1.5bn worth of 10-year eurobonds that were issued in September 2018 and paid a 7% coupon, according to the finance ministry.
At the beginning of October, there was speculation amid the investor community in London that a possible new Turkish eurobond issue was on the cards.
However, later in the month, Turkish President Recep Tayyip Erdogan went ahead with a military offensive against Kurdish fighters in northeast Syria. There is thus a big question mark over whether Erdogan will be able to obtain international market borrowings given the global condemnation, and even demonisation, he has been subjected to in response to the Syria incursion, which some analysts claim has included human rights atrocities.
The Turkish Treasury had about $2.7bn worth of deposits at the central bank as of October 25, according to bneIntellinews’ calculations.
Together with the $1.5bn scheduled for November 7, the Turkish Treasury will have redeemed a total of $3bn and €1.25bn this year, while raising a total of $8.7bn in eurobond sales. That included $7.25bn in USD papers, including $2bn from sukuks, and €1.25bn from five auctions held so far this year.
Turkish Treasury's Outstanding Eurobonds | ||||||||
Issue Date | Maturity | Year | Currency | Face (mn) | Face ($mn) | Coupon (%) | Type | ISIN |
03/09/2008 | 11/03/2019 | 10.5 | USD | 1,500 | 1,500 | 7.000 | Bond | US900123BD15 |
01/02/2007 | 02/04/2019 | 12.2 | EUR | 1,250 | 1,618 | 5.875 | Bond | XS0285127329 |
30/04/2009 | 07/11/2019 | 10.5 | USD | 1,500 | 1,500 | 7.500 | Bond | US900123BF62 |
20/04/2010 | 18/05/2020 | 10.1 | EUR | 1,500 | 2,016 | 5.125 | Bond | XS0503454166 |
12/11/2010 | 18/05/2020 | 9.5 | EUR | 500 | 689 | 5.125 | Reopen | XS0503454166 |
02/06/2005 | 05/06/2020 | 15 | USD | 1,250 | 1,250 | 7.000 | Bond | US900123AX87 |
23/02/2007 | 05/06/2020 | 13.3 | USD | 750 | 750 | 7.000 | Reopen | US900123AX87 |
01/12/2017 | 07/12/2020 | 3 | JPY | 60,000 | 534 | 1.810 | Bond | JP579200AHQ2 |
11/03/2011 | 18/03/2021 | 10 | JPY | 180,000 | 2,171 | 1.870 | Bond | JP579200ABF8 |
11/03/2010 | 30/03/2021 | 11.1 | USD | 1,000 | 1,000 | 5.625 | Bond | US900123BH29 |
05/08/2010 | 30/03/2021 | 10.7 | USD | 1,000 | 1,000 | 5.625 | Reopen | US900123BH29 |
01/06/2016 | 08/06/2021 | 5 | USD | 1,000 | 1,000 | 4.251 | Sukuk | XS1303467077 |
05/11/2013 | 12/11/2021 | 8 | EUR | 1,250 | 1,688 | 4.350 | Bond | XS0993155398 |
13/02/2019 | 21/02/2022 | 3 | USD | 2,000 | 2,000 | 5.800 | Sukuk | XS1816199373 |
08/03/2012 | 15/03/2022 | 10 | JPY | 90,000 | 1,114 | 1.470 | Bond | JP579200ACF6 |
17/10/2011 | 25/03/2022 | 10.4 | USD | 1,000 | 1,000 | 5.125 | Bond | US900123BY51 |
18/01/2012 | 26/09/2022 | 10.7 | USD | 1,500 | 1,500 | 6.250 | Bond | US900123BZ27 |
16/02/2012 | 26/09/2022 | 10.6 | USD | 1,000 | 1,000 | 6.250 | Reopen | US900123BZ27 |
08/01/2013 | 23/03/2023 | 10.2 | USD | 1,500 | 1,500 | 3.250 | Bond | US900123CA66 |
30/03/2017 | 06/04/2023 | 6 | USD | 1,250 | 1,250 | 5.004 | Sukuk | XS1586385178 |
08/04/2014 | 11/04/2023 | 9 | EUR | 1,000 | 1,372 | 4.125 | Bond | XS1057340009 |
16/10/2018 | 23/12/2023 | 5.2 | USD | 2,000 | 2,000 | 7.250 | Bond | US900123CR91 |
22/01/2014 | 22/03/2024 | 10.2 | USD | 2,500 | 2,500 | 5.750 | Bond | US900123CF53 |
02/07/2019 | 10/08/2024 | 5.1 | USD | 2,250 | 2,250 | 6.350 | Bond | US900123CV04 |
17/09/2014 | 25/09/2024 | 10 | JPY | 100,000 | 934 | 1.050 | Bond | JP579200AEM8 |
18/11/2014 | 25/11/2024 | 10 | USD | 1,000 | 1,000 | 4.489 | Sukuk | XS1141043296 |
13/01/2005 | 05/02/2025 | 20.1 | USD | 2,000 | 2,000 | 7.375 | Bond | US900123AW05 |
01/11/2006 | 05/02/2025 | 18.3 | USD | 1,250 | 1,250 | 7.375 | Reopen | US900123AW05 |
24/01/2019 | 31/03/2025 | 6.2 | EUR | 1,250 | 1,420 | 4.625 | Bond | XS1843443356 |
07/06/2017 | 14/06/2025 | 8 | EUR | 1,000 | 1,125 | 3.250 | Bond | XS1629918415 |
07/11/2018 | 16/02/2026 | 7.3 | EUR | 1,500 | 1,712 | 5.200 | Bond | XS1909184753 |
08/04/2015 | 14/04/2026 | 11 | USD | 1,500 | 1,500 | 4.250 | Bond | US900123CJ75 |
02/03/2016 | 09/10/2026 | 10.6 | USD | 1,500 | 1,500 | 4.875 | Bond | US900123CK49 |
20/10/2016 | 09/10/2026 | 10 | USD | 1,500 | 1,500 | 4.875 | Reopen | US900123CK49 |
18/01/2017 | 25/03/2027 | 10.2 | USD | 2,000 | 2,000 | 6.000 | Bond | US900123CL22 |
23/02/2017 | 25/03/2027 | 10.1 | USD | 1,250 | 1,250 | 6.000 | Reopen | US900123CL22 |
09/01/2018 | 17/02/2028 | 10.1 | USD | 2,000 | 2,000 | 5.125 | Bond | US900123CP36 |
16/04/2018 | 24/10/2028 | 10.5 | USD | 2,000 | 2,000 | 6.125 | Bond | US900123CQ19 |
09/01/2019 | 26/04/2029 | 10.3 | USD | 2,000 | 2,000 | 7.625 | Bond | US900123CT57 |
26/03/2019 | 26/04/2029 | 10.1 | USD | 1,000 | 1,000 | 7.625 | Reopen | US900123CT57 |
10/01/2000 | 15/01/2030 | 30 | USD | 1,500 | 1,500 | 11.875 | Bond | US900123AL40 |
30/01/2013 | 07/02/2033 | 20 | JPY | 18,400 | 203 | 2.680 | Bond | JP579200ADE7 |
07/01/2004 | 14/02/2034 | 30.1 | USD | 1,500 | 1,500 | 8.000 | Bond | US900123AT75 |
04/01/2006 | 17/03/2036 | 30.2 | USD | 1,500 | 1,500 | 6.875 | Bond | US900123AY60 |
14/11/2006 | 17/03/2036 | 29.3 | USD | 750 | 750 | 6.875 | Reopen | US900123AY60 |
17/01/2007 | 17/03/2036 | 29.2 | USD | 500 | 500 | 6.875 | Reopen | US900123AY60 |
27/02/2008 | 05/03/2038 | 30 | USD | 1,000 | 1,000 | 7.250 | Bond | US900123BB58 |
05/01/2010 | 30/05/2040 | 30.4 | USD | 2,000 | 2,000 | 6.750 | Bond | US900123BG46 |
05/01/2011 | 14/01/2041 | 30 | USD | 1,000 | 1,000 | 6.000 | Bond | US900123BJ84 |
26/06/2012 | 14/01/2041 | 28.6 | USD | 1,000 | 1,000 | 6.000 | Reopen | US900123BJ84 |
11/12/2012 | 14/01/2041 | 28.1 | USD | 1,000 | 1,000 | 6.000 | Reopen | US900123BJ84 |
09/04/2013 | 16/04/2043 | 30 | USD | 1,500 | 1,500 | 4.875 | Bond | US900123CB40 |
13/01/2015 | 16/04/2043 | 28.3 | USD | 1,500 | 1,500 | 4.875 | Reopen | US900123CB40 |
12/02/2014 | 17/02/2045 | 31 | USD | 1,500 | 1,500 | 6.625 | Bond | US900123CG37 |
04/05/2016 | 17/02/2045 | 28.8 | USD | 1,500 | 1,500 | 6.625 | Reopen | US900123CG37 |
04/05/2017 | 11/05/2047 | 30 | USD | 1,750 | 1,750 | 5.750 | Bond | US900123CM05 |
13/09/2017 | 11/05/2047 | 29.7 | USD | 1,750 | 1,750 | 5.750 | Reopen | US900123CM05 |
source: treasury |
The next scheduled eurobond redemption is set for May 18, 2020 to repay €2bn for 10-year EUR-denominated papers. In 2020, the Treasury will also, on June 5, redeem $2bn in 15-year USD papers as well as, on December 3, JPY60mn in samurai bonds.
From November 2019 to September 2020, the Treasury is scheduled to repay a total of $11.1bn in external debt principal and interest payments, according to latest data from the finance ministry.
Lately, local lender Garanti BBVA successfully redeemed on October 17 $750mn worth of 5-year USD-denominated eurobonds, which paid a 4.75% coupon.
The next scheduled eurobond redemption by a Turkish lender is scheduled for January 24, 2020 when private lender Akbank will repay $500mn (XS1111101314), according to Is Invest’s daily fixed income bulletin.
Also in 2020, state-run Halkbank will repay on February 5 $750mn (XS0882347072) while TSKB will redeem on April 22 $350mn and Isbank will repay on April 30 $750mn.
For the Turkish real sector, the next scheduled eurobond redemption is scheduled for April 24, 2020 when Koc Holding will repay $750mn (XS0922615819), which was already refinanced in March this year during a boom in eurobond issuances by Turkish issuers just prior to the storm over the Erdogan administration’s manipulation of financial markets that started in the week prior to the March 31 local election polls.
Major Eurobond Issues by Turkish Issuers | |||||
Issuer | ISIN | Coupon | Volume (USD mn) | End of placement | Maturity date |
Treasury | US900123CV04 | 6.350% | 2250 | 07/10/2019 | 08/10/2024 |
Vakifbank | 150 | 06/25/2019 | 2024 | ||
Vakifbank | XS1970705528 | 8.125% | 600 | 03/21/2019 | 03/28/2024 |
Sisecam | XS1961010987 | 6.95% | 700 | 03/20/2019 | 03/14/2026 |
Treasury | US900123CT57 | 7.625% | 1000 | 03/26/2019 | 04/26/2029 |
Yapi Kredi Bank | XS1958649854 | 8.25% | 500 | 03/07/2019 | 10/15/2024 |
Koc Holding | XS1961766596 | 6.50% | 750 | 03/05/2019 | 03/11/2025 |
QNB Finansbank | XS1959391019 | 6.875% | 500 | 02/28/2019 | 09/07/2024 |
Yapi Kredi Bank | XS1957348441 | FRN | 321.6 | 02/25/2019 | 11/25/2027 |
Turk Telekom | XS1955059420 | 6.875% | 500 | 02/21/2019 | 02/28/2025 |
Treasury (sukuk) | XS1816199373 | 5.80% | 2000 | 02/21/2019 | 02/21/2022 |
Treasury | 4.63% | EUR1.25bn | 01/31/2019 | 03/31/2025 | |
Eximbank | XS1917720911 | 8.25% | 500 | 01/24/2019 | 01/24/2024 |
Treasury | 7.625% | 2000 | 01/16/2019 | 04/26/2029 | |
source: cbonds, intellinews |
Also in 2020, Yasar Holding will redeem on May 6 $172mn (XS1132450427) while glassmaker Sisecam will repay on May 9 $300mn, already refinanced in March this year. Mersin Port will redeem on August 12 $450mn ((XS0957598070).
According to recent Reuters reports, Mersin Port and Turkey’s flag carrier Turkish Airlines are currently in the debt market.
The latest eurobond auction by the Treasury was held in July to sell $2.25bn worth of 5-year USD-denominated papers with a coupon rate of 6.35%. That was also the latest eurobond sale held by a Turkish issuer.
Fitch Ratings places 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 rates Turkey at B+/Stable, also four notches below investment grade.
Meanwhile, the Turkish government sticks to its FX and gold dominated domestic borrowing at a pace that continues to raise eyebrows.
The Treasury has borrowed a total of 82.3 tonnes of gold from the domestic market since October 2017, Finance Minister Berat Albayrak said on November 5 in a tweet.
Government-run news service Anadolu Agency reported details showing that 2.5 tonnes was borrowed in October 2017, 1.9 tonnes in April 2018, 2.1 tonnes in September-October 2018 and 1.1 tonnes in December 2018-February 2019. All of it came from individual investors.
From institutional investors, 26.18 tonnes was borrowed in February this year, 8.01 tonnes in June, 20.9 tonnes in September, 15.68 tonnes in October and 10.39 tonnes in November.
Central government debt stock rose by 16% year-to-date to TRY1.24 trillion at end-September. It consisted of TRY701bn in domestic debt and TRY538bn in external debt.
Meanwhile, the FX-denominated debt amounts to TRY607bn, suggesting TRY69bn worth of outstanding FX-denominated domestic debt stock.