Turkish Banks’ Foreign Debt Made Investment Grade at Moody’s

Five Turkish banks had their foreign currency debt raised to investment grade at Moody’s Investors Service.

The ratings for Akbank TAS (AKBNK), Turkiye Garanti Bankasi AS (GARAN), Turkiye Is Bankasi (ISATR) AS, Turkiye Vakiflar Bankasi (VAKBN) AS and Yapi & Kredi Bankasi AS (YKBNK) were raised two levels to Baa2, Moody’s said in an e-mailed statement today from Frankfurt.

The upgrade of Turkey’s sovereign rating to Ba1, one level below investment grade, on June 20 “had credit-positive effects on ratings of various banks,” Moody’s analysts Arif Bekiroglu and Carola Schuler said in the statement.

Yields on $500 million of 2016 bonds issued by Turkiye Is Bankasi AS, the country’s biggest bank by assets, dropped two basis points to 4.56 percent at 12:35 p.m. in Istanbul. Yields on state-run Vakifbank’s $500 million of 2017 bonds fell two basis points to 5.17 percent.

Finansbank AS, the Turkish unit of National Bank of Greece SA, and the Export Credit Bank of Turkey were rated Ba1, one level below investment grade, Moody’s said.

Moody’s increased the long-term foreign currency deposit ratings of 14 Turkish banks by one level to Ba2, according to the statement. It also lowered the so-called stand alone credit assessment on 11 Turkish banks to Ba1.

To contact the reporter on this story: Mark Bentley in Istanbul at mbentley3@bloomberg.net

To contact the editor responsible for this story: Riad Hamade at rhamade@bloomberg.net