Turkey Raising $1 Billion in First Dollar Sukuk Since 2014by and
Offering of five-year debt launched at MS+290 basis points
Sale is Turkey’s first dollar sukuk since November 2014
Turkey is ending a 18-month absence from the Islamic finance market with a $1 billion dollar-denominated sukuk, its first since November 2014, according to a person familiar with the deal.
The government is offering five-year notes at 290 basis points above the midswap rate, narrowed from earlier guidance at around 315 basis points, the person said, asking not to be identified because the information is private. HSBC Holdings Plc, Standard Chartered Plc and Emirates NBD Capital Ltd. are managing the transaction.
Turkey is following other sovereigns in the region racing to sell debt before the Federal Reserve acts on its stated intention to increase interest rates. Turkey has already raised $3 billion in international capital markets this year, completing two-thirds of its planned borrowing program for 2016.
The yield on Turkey’s sukuk due November 2014 fell 32 basis points this year to 4.74 percent as of 5:32 p.m. in Istanbul. Turkish government debt is rated Baa3 at Moody’s Investors Service, the lowest investment grade.