Turkey

Confidence in Turkey is flagging this week as the currency is fluctuating and Turkish president Recep Tayyip Erdogan has imposed limitations on Turkish banks lending lira.

Akbank has closed an oversubscribed loan, welcoming eight new banks to its syndicate and kickstarting the refinancing season for Turkish banks. The deal was signed amid increasing market uncertainty in Turkey, with the lira having weakened and uncertainty surrounding local elections this weekend.

Turkey has had a sensational quarter, with borrowers from the country raising more than $10.2bn in the market — the highest total in history. But with its central bank short of reserves and its currency struggling to hold on to its gains, a cap in hand visit to the IMF may be around the corner, and Turkish issuers’ best funding days may be behind them.

Bankers remain confident that Turkey's 'resilient' banking system will weather increasing political and economic volatility, as the country enters a recession and approaches local elections.

The Turkish lira has suffered heavy losses against the dollar, falling to its weakest level since October 2018 and shaking market participants’ confidence in the ability of the country's borrowers to access the market.

Turkey’s capital markets rehabilitation has been one of the most remarkable emerging markets stories of the past six months, but investors’ appetite for the nation’s paper is finally starting to wear thin.

Vakifbank is taking orders for a five year dollar bond — its first benchmark deal in more than a year.

Vakifbank will be the next borrower to join the growing list of Turkish credits returning to the bond market after the nation’s currency crisis in 2018.

The Republic of Turkey is returning to the bond markets for the fourth time this year with a dollar tap of the $2bn 7.625% 2029s it sold in January, continuing to front load for its $8bn 2019 funding target.

Garanti Bank, Turk Eximbank and Ziraat Bank have begun refinancing one year loans, according to two loans bankers. Pricing is said to be in line with Akbank, which launched a refinancing in early February.

Turkey’s economy contracted sharply in the last quarter of 2018, bringing the economy into a formal recession. But investors remain happy to pile into Turkish paper.

Two Turkish borrowers hit the market on Thursday, following in the wake of a Koç Holding trade earlier in the week and making it Turkey’s busiest week for deals in almost three years.