TC Ziraat Bankasi AS, Turkey’s biggest state-run lender by assets, plans to sell its first ever Eurobond, according to an e-mail from its investor relations department today.
“The Eurobond would be a benchmark size as a first sign of intent” and Ziraat aims to be a “regular player in the international markets from then on,” the bank said. Ziraat will be observing market conditions closely for the most appropriate moment to place the sale and has not yet agreed terms with potential arrangers, it said.
The announcement comes a week after Turkiye Garanti Bankasi AS (GARAN), Turkey’s largest listed lender, sold $750 million of 5.5-year unsecured senior paper. That was the first large foreign-denominated corporate debt sale from Turkey since December, when the U.S. Federal Reserve said that it would start tapering its monthly bond purchases.
The Fed’s announcement coincided with a corruption investigation into senior members of Turkey’s ruling Ak Party and their business associates that was made public on Dec. 17. The probe rattled markets and sent yields on benchmark two-year bonds to two-year highs.
“This has been planned for a while but the climate was too volatile before, so Ziraat is aiming to take advantage of the new stable, post-election climate to issue at good rates,” Ziraat said, referring to March 30 municipal elections won by Prime Minister Recep Tayyip Erdogan’s ruling party.
The yield on benchmark two-year government bonds rose 8 basis points to 9.75 percent at 12:23 pm in Istanbul. The lira weakened 0.2 percent to 2.1307 per dollar.
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