Page 93 - TURKRptMay19

“Turkey carry attractive after elections,” Raiffeisen Research said on April 1 in its global strategy update. However, later in the month, it changed on April 12 its “Buy” recommendation for Turkish government bonds to “Hold”.
Turkish public lender Halkbank to issue debt instruments and borrow at home and abroad to strengthen capital base . Turkey's Halkbank has said it is to issue debt instruments and borrow on domestic and foreign markets to strengthen its capital base. The capital base was weakened after the public lender provided low-interest loans in the wake of last year's currency crisis. Government officials have pressured state banks to step up such lending, a wave of which was called for in advance of the March 31 local elections. The state-run bank said late on April 15 that it plans to issue debt instruments or borrow a total of €2bn and Turkish lira (TRY) 10bn ($1.74bn) on the Turkish market, and also borrow euros or equivalent abroad. The moves would be made to meet its Additional Tier 1 (AT1) capital requirements. Halkbank is Turkey's sixth-largest bank by assets. Reuters reported that Oyak Yatirim wrote in a note to clients that its issuance could turn out to be part of the government’s capital pledge. There is still anxiety on the market that Halkbank could face US action and fines in the wake of the conviction in New York of one of its deputy CEOs, Hakan Atilla, in an Iran sanctions-busting case. The situation has caused the bank to favour Turkish lira funding. It did not borrow from abroad for two years during Atilla's detention and hearings. It has also not moved ahead with the issuance of up to $2bn worth of debt instruments abroad decided upon and announced last December.
Turkey on a roll. Turkey has also been on a roll. It saw its busiest bond week in three years in March as both the government and corporates rushed to tap the market. Issuers were intent on raising war chests of FX reserves – the currency instability that at the end of last year plunged the Turkish economy into recession for the first time in a decade returned at the end of the month.
As Turkish private companies hurried into selling eurobonds following government debt sales, Turks continued to buy FX. Turkish resident individuals’ FX deposits at local lenders rose by another $700mn to $103.6bn as of March 1, according to the central bank’s weekly bulletin published on March 7.
8.5.1 Fixed income - govt funding plans
The Erdogan administration plans to raise the equivalent of $8bn of external funding in 2019 through bond issues on global capital markets . It raised $7.7bn in financing from such markets in 2018, as opposed to its $6.5bn annual target. Turkey raised $9.1bn from international markets in 2017 versus the planned $6bn.
93 TURKEY Country Report May 2019 www.intellinews.com