Emirates NBD Capital acted as the intermediary in 26 eurobond auctions held by Turkish issuers in 2024 and in four deals in January, Zawya reported on February 25.

“In 2021, we did two [Turkish] deals. 2021, 2022 and 2023 to some extent were very quiet because of unorthodox policies and geopolitics,” Ritesh Agarwal, debt capital market head at the UAE bank told the publication.

HSBC (London/HSBA), meanwhile, participated in 21 eurobond auctions held by Turkish sellers between June 2023 and end-2024.

Since Turkey went "orthodox"

From June 2023, when Turkey's "orthodox" finance minister Mehmet Simsek took the wheel, to end-2024, Turkish issuers, including the country’s Treasury, banks and corporates, sold a total of 64 papers, including conventional eurobonds and sukuks.

Major eurobond issues by Turkish issuers
Issuer	ISIN	Coupon	Volume (mn)	End of placement	Maturity	UST+	CDS+
Akbank (AKBNK)	XS3013974533	7.875%	$500	Feb 25, 2025	Sep 4, 2035(/29)	358	531
Yapi Kredi Bank (YKBNK)	XS3013242196	7.25%	$500	Feb 24, 2025	Mar 3, 2030	302	481
Anadolubank	XS2993969596	9.125%	$150	Feb 19, 2025	Feb 26, 2035(/29)	460	670
Treasury	US900123DP27	7.125%	$2,500	Feb 6, 2025	Feb 12, 2032	280	461
Limak Yenilenebilir Enerji	XS2989570945	9.625%	$450	Feb 5, 2025	Aug 12, 2030	539	707
Turkey Wealth Fund (TVF/TWF) (sukuk)	XS2911679004	6.95%	$250	Jan 30, 2025	Jan 23, 2030	-	-
Ziraat Bank	XS2966430683	7.25%	$750	Jan 29, 2025	Feb 4, 2030	290	465
Turkcell (TCELL)	XS2981975613	7.65%	$500	Jan 16, 2025	Jan 24, 2032	315	494
Turkcell (TCELL)	XS2981975027	7.45%	$500	Jan 16, 2025	Jan 24, 2030	306	474
Isbank (ISCTR)	XS2970145012	9.125%	$500	Jan 9, 2025	Perpetual (Jan 2030)	417	649
Garanti BBVA (GARAN) (subordinated)	XS2913414384-US900148AG22	8.125%	$750	Nov 21, 2024	Jan 3, 2035(/29)	370	557
Albaraka Turk (ALBRK)	-	-	$120	Nov 7, 2024	Nov 2034(/29)	-	-
Treasury (sukuk)	XS2900389870	6.50%	$2,500	Nov 19, 2024	Apr 26, 2030	225	393
Zorlu Enerji (ZOREN)	XS2926261426	11.00%	$200	Nov 1, 2024	Apr 23, 2030	678	837
ICA Ictas Altyapi	XS2924873719	7.536%	$405	Nov 1, 2024	Oct 31, 2027	336	487
Turkey Wealth Fund (TVF/TWF) (sukuk)	XS2911679004	6.95%	$750	Oct 17, 2024	Jan 23, 2030	305	421
Zorlu Enerji (ZOREN)	XS2926261426	11.00%	$800	Oct 17, 2024	Apr 23, 2030	710	826
QNB Turkey (QNBFB)	XS2921631185	-	$150	Oct 16, 2024	Sep 20, 2029	-	-
QNB Turkey (QNBFB)	XS2921631003	-	$25	Oct 16, 2024	Sep 20, 2029	-	-
TSKB (TSKB)	XS2919891361	7.125%	$350	Oct 9, 2024	Oct 17, 2029	322	439
GDZ Elektrik (Aydem)	XS2911134604	9.00%	$400	Oct 8, 2024	Oct 15, 2029	514	625
Ronesans Holding	XS2915523661	8.50%	$350	Oct 3, 2024	Oct 10, 2029	488	582
Fibabanka	XS2801110581	10.25%	$150	Sep 30, 2024	Perpetual (Apr 2030)	611	757
Vakifbank (VAKBN)	XS2913966318	6.875%	$500	Sep 30, 2024	Jan 7, 2030	330	420
Treasury	US900123DN78	6.50%	$3,500	Sep 25, 2024	Jan 3, 2035	298	381
ING Turkey	XS2836961032	8.50%	$150	Sep 17, 2024	Dec 24, 2034(/29)	485	582
Turk Ekonomi Bankasi (TEB) (AT1)	XS2888538431	9.375%	$300	Sep 6, 2024	Perpetual (Sep 2029/Mar 2030)	588	665
Pegasus (PGSUS)	XS2897383043/US705567AB14	8.00%	$500	Sep 5, 2024	Sep 11, 2031	437	528
Yapi Kredi Bank (YKBNK)	XS2896892655	7.125%	$500	Sep 4, 2024	Oct 10, 2029	348	447
Eregli (Erdemir/EREGL)	XS2861686041	8.125%	$200	Jul 29, 2024	Jul 23, 2029	429	586
Limak Cimento	XS2862382541	9.75%	$575	Jul 16, 2024	Jul 25, 2029	564	722
Eregli (Erdemir/EREGL)	XS2861686041	8.375%	$750	Jul 16, 2024	Jul 23, 2029	429	586
Treasury	US900123DL13	7.125%	$1,750	Jul 10, 2024	Jul 17, 2032	287	458
Ulker (ULKER)	XS2855391533 / US903742AB05	7.875%	$550	Jul 2, 2024	Jul 8, 2031	343	516
Vakifbank (VAKBN)	XS2850573374	9.00%	$700	Jun 26, 2024	Oct 5, 2034(/29)	468	627
Akbank (AKBNK)	XS2842188687 - US00971YAL48	7.498%	$500	Jun 13, 2024	Jan 20, 2030	326	490
Isbank (ISCTR)	XS2654059752 - US90016BAH15	7.75%	$500	Jun 6, 2024	Jun 12, 2029	346	513
QNB Finansbank (QNBFB)	XS2798098310	7.25%	$500	May 21, 2024	May 21, 2029	282	462
Turk Telekom (TTKOM)	XS2820499619	7.375%	$500	May 20, 2024	May 20, 2029	292	475
Vestel Elektronik (VESTL)	XS2817919587	9.75%	$450	May 15, 2024	May 15, 2029	540	705
Sisecam (SISE)	-	8.00%	$225	May 14, 2024	May 2, 2032	355	532
Sisecam (SISE)	-	7.50%	$175	May 14, 2024	May 2, 2029	304	482
Turk Ekonomi Bankasi (TEB) (subordinated)	XS2796472384	Euribor+	$100	May 8, 2024	May 8, 2034(/29)	-	-
Ziraat Bank	XS2802184999	8.9941%	$500	Apr 30, 2024	Aug 2, 2034(/29)	430	603
Ford Otosan (FROTO)	XS2782775345	7.125%	$500	Apr 25, 2024	Apr 25, 2029	243	411
Sisecam (SISE)	-	8.625%	$600	Apr 24, 2024	May 2, 2032	398	552
Sisecam (SISE)	-	8.25%	$500	Apr 24, 2024	May 2, 2029	361	514
Vakifbank (VAKBN) (AT1)	XS2793703500	10.1173%	$550	Apr 17, 2024	Perpetual (April 2029/34)	541	705
Yapi Kredi Bank (YKBNK) (AT1)	XS2796491681 - US984848AS09	9.743%	$500	Mar 26, 2024	Perpetual (July 2029/34)	534	660
TSKB (TSKB) (AT1)	XS2778918834 / US90015YAF60	9.75%	$300	Mar 14, 2024	Perpetual	531	659
Treasury	XS2790222116	5.875%	€2,000	Mar 15, 2024	May 21, 2030	MS+316	272
Akbank (AKBNK) (AT1)	XS2783589844 - US00971YAK64	9.3686%	$600	Mar 7, 2024	Perpetual	512	615
Garanti BBVA (GARAN) (subordinated)	XS2773062471	8.375%	$500	Feb 21, 2024	Feb 28, 2034(/29)	406	548
Treasury	US900123DK30	7.625%	$3,000	Feb 8, 2024	May 15, 2034	348	441
We Soda (UK/Ciner)	USG95448AC32	9.375%	$500	Feb 7, 2024	Feb 14, 2031	532	612
Turkey Wealth Fund (TVF/TWF)	XS2764457235	8.25%	$500	Feb 7, 2024	Feb 14, 2029	419	499
Eximbank	XS2750476603	7.50%	$500	Jan 30, 2024	Feb 6, 2028	350	439
Turk Ekonomi Bankasi (TEB) (subordinated)	XS2744911830	9.375%	$400	Jan 10, 2024	Jan 17, 2034(/29)	534	633
Yapi Kredi (YKBNK) (subordinated)	XS2741069996	9.25%	$650	Jan 10, 2024	Jan 17, 2034(/29)	521	621
Ziraat Bank	XS2741927805	8.00%	$500	Jan 9, 2024	Jan 16, 2029	403	492
TAV (TAVHL)	XS2729164462/US87216EAA47	8.50%	$400	Nov 30, 2023	Dec 7, 2028	419	512
Istanbul Municipality (IBB)	XS2730249997	10.50%	$715	Nov 29, 2023	Dec 6, 2028	628	718
Yapi Kredi Bank (YKBNK)	XS2724475194	9.25%	$300	Nov 20, 2023	Oct 16, 2028	481	576
Mersin Port	US590454AC80	8.25%	$600	Nov 8, 2023	Nov 15, 2028	374	459
QNB Finansbank (QNBFB) (subordinated)	XS2678233243	10.75%	$300	Nov 9, 2023	Nov 15, 2033 (/28)	613	705
Treasury (sukuk)	XS2689091846	8.5091%	$2,500	Nov 7, 2023	Jan 14, 2029	394	491
Ziraat Katilim (sukuk)	XS2699906512	9.375%	$500	Nov 6, 2023	Nov 12, 2026	476	570
Eximbank	XS2692231975	9.00%	$500	Oct 25, 2023	Jan 28, 2027	341	496
We Soda (UK/Ciner)	US92943TAA16	9.50%	$980	Sep 28, 2023	Oct 6, 2028	488	565
Arcelik (ARCLK)	XS2695038401	8.50%	$500	Sep 25, 2023	Sep 25, 2028	393	467
TSKB (TSKB)	XS2678232781	9.375%	$300	Sep 19, 2023	Oct 19, 2028	487	550
Yapi Kredi Bank (YKBNK)	XS2445343689	9.25%	$500	Sep 13, 2023	Oct 16, 2028	486	550
Vakifbank (VAKBN)	XS2677517497	9.00%	$750	Sep 12, 2023	Oct 10, 2028	464	527
Akbank (subordinated)	XS2611752317/XS2611752663/XS2611747234	9.60%	$300	Jul 25, 2023	Jul 25, 2033(/28)	574	525

Table: Eurobond sales by Turkish issuers since June 2023.

Between 2015 and 2022, Turkish issuers’ eurobond auction volumes averaged $13bn per annum and were mainly sovereign papers.

In 2023, Turkish issuers sold $17bn worth of eurobonds across 19 auctions, while they redeemed a total of $11bn across 15 papers.

In 2024, Turkish eurobond sellers raised a total of $33bn from 46 papers, setting an annual record, while redeeming $16bn on 19 papers.

Gulf interest

Middle East-based investors’ share in eurobond auctions held by Turkish issuers rose to 15-25%s from 1-2% while the UK and the wider European region share was in the 40-50%s.

“We have spent a lot of time with regional investors over the last few years to educate them on the Turkey story, including reverse roadshows in Turkey, and the effort is paying dividends now,” Agarwal also said.

Turkey’s government has also promoted sukuk and other Shariah-compliant instruments.

Turkey has become the third largest Islamic paper seller among the G20 countries, following Indonesia and Malaysia, Abdeslam Alaoui, head of CEEMEA capital markets at Deutsche Bank (Frankfurt/DBK), told Zawya. 

The Gulf banks’ participation in Turkish bonds is a trend, an unnamed bond trader told the publication.

A robust Turkish bond market has been the trend since the presidential election held in May 2023, Khaled Darwish, CEEMEA debt capital market head at HSBC, was reported as saying by the media outlet.

Debut corporates

In 2024, Turkish eurobond supply increased by 298% y/y while corporate supply increased by 332% y/y, according to Alaoui of Deutsche. 

“On the corporate side, we had at least four to five new debuts last year and will continue to get more debuts this year, including from new sectors that previously relied on bank lending,” Darwish of HSBC has said.

“We have never done corporates in the past in Turkey. In 2023, we did a couple of trades including WE Soda. Last year, we did six corporates. This year, we have already done bond trades for Turkcell (TCELL) and Limak Energy,” Agarwal of Emirates NBD Capital said.

In 2024, a total of nine debut eurobond sellers from Turkey, including the country's sovereign wealth fund (TWF/TVF) set a record in taking to the stage.

On February 21, Anadolubank sold $150mn of debut subordinated (Tier II) eurobonds (XS2993969596) due February 2035 at a coupon rate of 9.125%.

Syndicated loans

The Gulf banks' activities were not confined to only the bond and sukuk market, Darwish of HSBC also said, adding that they have also participated in syndicated loans in the country.

“We are very active on the loans as well in Turkey,” Agarwal of Emirates NBD said.

The Gulf banks also have subsidiaries in Turkey. Denizbank is a unit of Emirates NBD while Islamic lender Kuveyt Turk (KFINKK) is a unit of Kuwait Finance House (Kuwait/KFH) and QNB Turkey (QNBFB), formerly QNB Finansbank, is a unit of Qatar National Bank (QNB).

Moody’s awaited

The spreads over Turkish papers have been rallying to 250bp-levels from the peak of 500bp seen in October 2023.

“The problem with Turkey is how much further the rally can go. It’s been a big rally. The country’s rating has doubled. But can it continue to rally further, and by how much more? We need to see that,” the unnamed bond trader said.

A rating upgrade coupled with a positive outlook from Moody’s would be a particularly market-positive development, said Alaoui of Deutsche.

Turkey currently has a BB-/Stable rating (at three notches below investment grade) from Fitch Ratings, a B1/Positive (at four notches below investment grade) from Moody’s Investors Service and a BB-/Stable (at three notches below investment grade) from S&P Global Ratings.

In 2024, all three agencies upped Turkey’s ratings by two notches.

Moody’s released a Turkey review on January 24 (skipped with no action). It has another due on July 25.

Fitch scheduled to review Turkey’s ratings on January 31 (affirmed) and July 25, while S&P pinned April 25 and October 17 to its review horizon.