Page 11 - bne_March2019_20190306 magazine

bne March 2019 Companies & Markets I 11
Turkish 3-year sukuk raises $2bn at 5.8% on soaring demand
Akin Nazli in Belgrade
The Turkish Treasury on February 13 sold $2bn worth of 3-year lease certificates with a yield to the investor of 5.80%, it said on February 14 in a written statement.
The initial price guidance for the sukuk bonds (Islamic bonds) due February 2022 fell to 5.9% from 6.125% as demand soared to more than $3.5bn, Reuters reported on February 13, citing unnamed banking sources.
“The offering attracted an orderbook of approximately three times the actual issue size,” according to the statement from the Treasury.
The spread over market rates continued to decline sharply in the latest international sale. It fell to 318bp over the mid-swaps (MP), the lowest level since January 2018. Spreads on Turkey’s eurobond sales reached 497bp in the January 2019 auction (See table below).
Turkey has raised $5.4bn from the international capital markets in 2019 to date.
Turk Telekom eurobonds
Also on February 14, Turkey’s largest telco, Turk Telekom, said in a bourse filing that its high-level management would carry out investor meetings arranged by mandated lenders Bank of America Merrill Lynch, Citi, ING, MUFG and Societe Generale in London, Boston and New York, starting from February 15 to issue $500mn worth of eurobonds with maturities between 5 and 7 years.
Last week, the Capital Markets Board’s (SPK’s) regular weekly bulletin showed that Turk Telekom had been given the green light to issue up to $500mn worth of eurobonds abroad.
Also on February 14, Standard & Poor’s said in a written statement that it had affirmed Turk Telekom at BB-/Stable.
Retail sales in Turkey
“We now expect a stronger Turkish lira against the U.S. dollar at 5.50 in 2019, compared with 6.90 in our previous base case,” the rating agency also said.
S&P was expected to release its sovereign rating review for Turkey on February 15.
Election economy? Nothing to see here
Even observers with only a modicum of cynicism should be
on the lookout for fiscal and monetary moves that might give target voters a lift in advance of the March 31 local elections in Turkey. The polls are increasingly being seen as a referendum on the Erdogan administration given the country’s economic turmoil following the currency crisis that rocked Turks last summer.
To populist President Recep Tayyip Erdogan there is plenty of blame to spread around both at home and abroad for Turkey’s economic woes, though none of the blame givers should tangle with his economic stewardship or that of
“The offering attracted an orderbook of approximately three times the actual issue size”
nearly all-powerful executive presidency. In the meantime, Turkish Finance Minister Berat Albayrak, who is Erdogan’s son-in-law, is busy yanking at what levers he can in the economic engine room.
February 15 also saw the central government budget data release for January. According to figures provided by the Ministry of Treasury and Finance, the central government’s budget surplus of TRY5.09bn was three times higher than the TRY1.67bn in January 2018.
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