Turkey

Turkey has come to market for a 10 year dollar benchmark, reasserting its status as one of emerging market bonds' most frequent borrowers after a turbulent 2018.

Yapi Kredi, the Turkish bank, has set the pricing for its additional tier one bond though eschewing a “traditional bookbuild process”.

Emerging markets have leapt back into action as investors take full advantage of the wider levels on offer in the asset class. Even some of the sector’s most turbulent credits are coming to market.

Yapı ve Kredi Bankası is planning an additional tier one dollar benchmark that looks likely to be the first issue of non-sovereign international bonds from the country since April.

Turkey is on track to continue its recovery in financial markets, as inflation declines and the lira rebounds from its crisis of August, according to syndicated loan bankers.

Emerging market issuers are hesitant to rush back into the market in the new year. Most are waiting on the sidelines until the tone becomes more settled and investor desks are fully staffed.

Turkey’s inflation fell for the second month running in December, prompting some analysts to predict that the central bank will cut the main interest rate in January, much to the concern of syndicate bankers.

Bankers have confirmed that Garanti Bank has closed syndication for a $1.15bn refinancing loan this week.

Once a darling of emerging markets investors, Turkey flirted with disaster in 2018 when instead of battling out-of-control inflation it followed voter-pleasing policies and plunged into a recession, amid a poisonous combination of political and monetary forces. Although Turkey and its banks have swiftly regained debt market access, its future is clouded by the harsh realities of global economics, write Lewis McLellan and Mariam Meskin.

The Turkish Central Bank has, much to the relief of many in capital markets, kept its central interest rate steady at 24%, paving the way for the sovereign to return to the bond market in January.

Akbank, one of the largest banks in Turkey, is preparing a TL3bn ($558m) rights issue amid fears of an increase in non-performing loans as the Turkish economy enters a slowdown.

The Turkish government is mulling plans to print asset backed securities against the country's banks' mortgage stock. Some are calling the idea a “bad bank in disguise”. It isn't, but Turkey will need one.