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Halkbank Selling 7-Year Dollar Debt Said to Cut Yield Offer

Jan. 29 (Bloomberg) -- Turkiye Halk Bankasi AS, Turkey’s biggest listed state lender, is selling its first dollar bonds in six months, according to a person with knowledge of the deal.

The lender is issuing $750 million of seven-year dollar bonds at a yield 255 basis points above the benchmark mid-swap rate, said the person, who asked not to be identified because the information isn’t public yet. The initial spread guidance today was 270 basis points, or 2.7 percentage points.

The Turkish lender has hired Commerzbank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Standard Chartered Plc to arrange investor meetings in Europe and the U.S. for selling a total of $2 billion of bonds in various maturities, the lender said in a statement to Istanbul stock exchange on Jan. 23.

“The new issue offers value at current spread,” Neslihan Yilmaz, a trader at Maxis Securities, the London-based unit of Turkiye Is Bankasi, said in an e-mailed note. “The yield on the bond is good.”

The rate on Halkbank’s planned seven-year dollar bond corresponds to a 4.04 percent yield, according to data compiled by Bloomberg. Similar notes from Turkiye Garanti Bankasi AS, Turkey’s biggest private lender, yield 3.86 percent.

Halkbank’s dollar bonds due 2017 sold in July at a yield of 4.875 percent traded at 3.38 percent by 6:42 p.m. in Istanbul. Moody’s Investors Service left Turkey’s credit rating unchanged at Ba1 yesterday, one step below investment grade, citing risks to the country’s current-account deficit as one of the factors influencing its decision.

The lira gained 0.3 percent to 1.7680 per dollar, after weakening as much as 0.4 percent yesterday. Turkey’s ISE National 100 Index dropped 4.2 percent yesterday, the steepest plunge since Sept. 2011. The benchmark gauge rose 1.3 percent today.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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