Turkey

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.

Turkey’s Ziraat Bank is planning to issue covered bonds and has published a base prospectus for its €1bn programme. However, it is questionable whether a euro benchmark from the issuer will be seen any time soon.

VakıfBank has closed an $855m-equivalent refinancing loan, making it the fifth Turkish financial institution to successfully refinance this season. Vakıf is set to be followed closely by Garanti Bank, as Turkish financial institutions defy the crisis of confidence in the country's economy that was triggered when the lira crashed in August.

VakıfBank will close its loan refinancing in the coming days and is set to be followed closely by Garanti Bank, as Turkish financial institutions defy the crisis of confidence in the country's economy triggered when the lira crashed in August.

TFI Tab Food Investments, the owner of the Burger King chain in Turkey and China, has formally withdrawn its $220m IPO in the US after delaying it in February.