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January 12, 2018 www.intellinews.com I Page 24
bne:Credit Turkey mandates banks
for 10-year dollar- denominated bond
Turkey has mandated Citigroup, Deutsche Bank and HSBC for the issuance of a dollar-denominated bond due in 2028, the treasury announced on January 9.
Initial pricing indications point to a yield of 5.3%, Reuters reported. In January 2017, the treasury borrowed $2bn through a 10-year dollar paper at a cost of 6.15%.
The authority said in October last year that it planned to raise $6.5bn of external funding in 2018 through bond issuances on international capital markets.
“Turkey always issues early in the year - they like to get cash in the bank early. Their annual financing target from the Eurobond market has been around USD6.5bn in recent years, but last year they did close to USD10bn, and I would expect something similar this year given the external financing pressures,” Timothy Ash at BlueBay Asset Management wrote in a note to investors on January 9.
Macedonia issued on January 11 a seven-year €500mn Eurobond with an annual interest rate of 2.75%, the finance ministry said.
This is the sixth Eurobond issue placed so far by Macedonia’s finance ministry with the lowest interest rate so far. For comparison, the interest rates on the previously issued five Eurobonds ranged between 3.975% and 9.875%.
“This is historically the lowest interest rate of the Eurobonds issued so far by the finance ministry, reflecting the extremely high confidence among international investors,” the ministry said in the statement.
The demand of investors for Macedonia’s new Eurobond was high, amounting €3.5bn, or seven times more than the offer. The Eurobond was sold with a yield of 3%.
The funds will be used to finance the budget deficit in 2018 and to repay all debts.
At the same time, Macedonia for the first time made a buyback of one third of the previous €270mn Eurobond issued in 2015, which will mature in December 2020. The interest rate of the previous issuance was 4.875%, which is significantly higher than the interest rate of the newly issued Eurobond.
The issue was organised by Citigroup, Deutsche Bank and Erste Group, Reuters reported, without providing other details.
Macedonia issues €500mn 7-year Eurobond