Turkey

Despite a plethora of risks for Turkish assets, including the lira hitting fresh lows and both banks and the sovereign facing downgrades, the bi-annual refinancing season for Turkish banks is up and running. According to lenders, Akbank will open the market with a deal likely to close soon.

During the last week, Turkey’s currency has hit damning lows and the sovereign has been given another credit downgrade. Many say these events should prompt the country to enact serious fiscal and monetary reforms.

Turkish lender Garanti BBVA has lost a director in its funding department.

A tumultuous week in Turkish currency markets ended with the lira hitting new lows against the dollar and the Central Bank of the Republic of Turkey finally taking action to try and calm volatility. Amid such swings, a sovereign bond issue looks unlikely.

Akbank, one of Turkey’s largest financial institutions, has raised a green bond, the first of its kind from the country since the Covid-19 pandemic began.

Turkey continued to teeter on the brink of a currency crisis this week, as the lira went on another rollercoaster ride and touched a record low.

Falls in the Turkish lira have reignited concerns about a currency crisis this week, with the Central Bank of the Republic of Turkey’s (CBRT) unorthodox exchange rate policy raising questions from investors about the robustness of the country’s respected banking sector. Mariam Meskin and Ross Lancaster report.

Despite the success of many emerging market sovereigns in issuing bonds in international markets this year, Turkey, typically a leading issuer, has been notable by its absence. And with its foreign exchange reserves running lower, the risks of it not being able to come to market at all could be mounting.

Bankers and investors say FIG issuance will return to the fore after a sovereign-dominated first half of the year. Three bank issuers this week showed that the market is open for non-sovereign issuers. As fears of a second wave of Covid-19 infections and November's US presidential elections threaten volatility, some say the usually quiet summer period may be inundated with EM issuance.

Akbank, the top tier Turkish bank, approached investors for a dollar benchmark bond on Tuesday. The deal comes amid expectations that emerging market investors have finally opened up for corporate and financial institution issuance.

Turkey Export-Import Bank has raised a €380m loan with a partial guarantee from the World Bank. The deal complements a successful first half of the year for Turkish lenders in capital markets, in which almost all the top tier banks have raised loans.

İşbank, Turkey's largest private bank by assets, is the latest financial institution from the country to refinance its existing debt, while managing to maintain competitive margins.