Page 33 - Turkey Outlook 2023

Turkey generally sells eurobonds in January, aiming to take a piece of
the market as new year investment plans are rolled out. Subsequent
issues from Ankara usually follow in the early months of the year.

In 2022, Turkish borrowers’ sold $12bn worth 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.

(See full list of Turkish sellers’ eurobond auctions in 2021 and 2022
below.)

In addition to the Treasury’s auctions, Coca-Cola Icecek (CCOLA) sold
$500mn of a 7-year eurobond with a coupon rate of 4.50% and a yield
of 4.75%. Icecek is a distinct case. Its ratings are higher than Turkey’s
sovereign ratings.

Istanbul Municipality sold $305mn of a eurobond due 2027 at a coupon
rate of 10.75%. The decision-makers at the Treasury and in the
municipalities do not repay the incredible coupons in question from their
own pockets. The mayor of Istanbul Municipality is trying to conduct a
political campaign founded on the building of some metro lines.

The last Turkish eurobond issuer of the year was the small-cap
Sekerbank (SKBNK). It decided not to call its $85mn subordinated
(Basel III-compliant Tier II) eurobond. Instead, it opted to extend the
tenor.

In 2021, Turkish borrowers sold a total of $17bn with 22 papers.

The sharp decline in 2022 is not related to the country-specific
conditions of Turkey. Central banks around the world pumped in
unprecedented amounts of money during the COVID-19 period. The
Turkish small caps came up with debut sales. Global tightening began
in 2022.

During the beginning of 2023, the tightening will be in place. When it
will be reversed is under discussion.

33 Turkey Outlook 2023 www.intellinews.com