Turkey

Akbank plans to launch the first of its semi-annual one year refinancings early next week in the loan market’s first chance this year to gauge appetite for Turkish risk, but there is already a clear indication already that longer tenors will be challenging.

Akbank is set to provide the loan market’s first gauge this year of appetite for Turkish risk, with the bank said to have opened talks with lenders about the first of its two annual refinancings.

Rating: Ba1/BBB-

Typically an early mover in the race to fund, Turkey raised $2bn on Wednesday with an SEC-registered note maturing March 2027, a third of the total $6bn it plans to raise this year. But the sovereign has plenty of hurdles ahead, writes Virginia Furness.

The Republic of Turkey has surprised market participants by opening books on a 10 year dollar benchmark — but the 40bp-45bp new issue premium at the starting point hints at the elevated price investors will be demanding for Turkish risk.

Türkiye Vakıflar Bankası (Vakibank) is asking investors exchange its old style tier two bonds for new Basel III compliant notes, making it the second Turkish bank in as many weeks to turn to liability management to boost its capital.

Turkish borrowers face a tough year as security concerns about the country threaten access to a funding market that is already expected to suffer volatility. But bankers say it is business as usual in Turkey, and investors agree that Turkish spreads are still an attractive prospect.

Likely faced with an assault course of volatility inducing events this year, emerging market issuers will be keen to raise cash early before Brexit/Trump/rate rises/European elections (delete as appropriate) come to blight the market.

The global rise in dollar funding, combined with political upheaval and the heavy depreciation of the lira are destroying some of the historically borrower-friendly terms available in the Turkish loan market. Elly Whittaker reports.

Turkish participation bank Turkiye Finans (TFKB) has agreed a $180m Islamic club loan with similar pricing to its loans in recent years, despite sector-wide downgrades for Turkish banks after a turbulent year in the country in 2016.

It’s that time of year when analysts dust off their crystal balls and make predictions for the next 12 months. In December 2015 not many were forecasting that Britain would vote to leave the EU, and even fewer were betting on a Donald Trump presidential victory, so investors would be wise to treat such missives with caution. Political risk is a capricious beast, even for the most seasoned market observers.

Turkey’s Elazig Hospital has placed an innovative project bond, the structure of which enabled it to achieve a rating two notches above the Turkish sovereign. With infrastructure financing needs huge in the emerging markets, the deal sets a strong precedent for future issuance.