{"id":10758,"date":"2023-11-07T18:48:37","date_gmt":"2023-11-07T18:48:37","guid":{"rendered":"https:\/\/infundpros.com\/business\/turkey-raises-2-5bn-in-first-deal-on-dollar-bond-market-since-april\/"},"modified":"2023-11-07T18:48:37","modified_gmt":"2023-11-07T18:48:37","slug":"turkey-raises-2-5bn-in-first-deal-on-dollar-bond-market-since-april","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=10758","title":{"rendered":"Turkey raises $2.5bn in first deal on dollar bond market since April"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=01e95aa9-ddee-410b-badf-0fec374dbde0\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Turkey has raised $2.5bn in its first deal on the dollar bond market since April as the country\u2019s broad economic policy shift lures back investors who abandoned Turkish assets in recent years.\u00a0<\/p>\n<p>The country received more than $7bn in bids on Tuesday for a new five-year dollar-denominated sukuk, a type of debt instrument compliant with Islamic religious law, according to a term sheet seen by the Financial Times.<\/p>\n<p>High demand for the deal is the latest sign of how investor sentiment is slowly improving after president Recep Tayyip Erdo\u011fan shook up his economic team following his re-election in May and set a path to end years of unconventional economic policies.<\/p>\n<p>\u201cThe government has been clawing back\u2009.\u2009.\u2009.\u2009[investors\u2019] trust in its story,\u201d said Stefan Weiler, JPMorgan\u2019s head of debt capital markets for central Europe, Middle East and Africa, who worked on the deal. <\/p>\n<p>He added that Turkey was able to clinch better terms than it would have several months ago because anxiety about Turkey\u2019s economic trajectory has eased somewhat following the elections.<\/p>\n<p>Turkey is also taking advantage of a recent fall in US bond yields, prompted by concerns over the state of the American economy, to lock in lower borrowing costs than would have been available several weeks ago, Weiler said.\u00a0<\/p>\n<p>The five-year sukuk was sold with a yield of 8.5 per cent, according to the term sheet.\u00a0Turkey\u2019s finance ministry declined to comment on the debt issuance. <\/p>\n<p>The $2.5bn sukuk issuance will mean that Turkey has fulfilled its goal of raising $10bn on international capital markets this year. The previous $7.5bn was raised in conventional and green dollar bonds, but one person familiar with the deal said the sukuk helped draw in both western investors and those in the Gulf to whom Islamic finance is appealing.\u00a0Turkey plans to raise another $10bn on international debt markets next year. <\/p>\n<p>The deal comes at a time when the price of Turkish assets on financial markets has been improving. A conventional dollar-denominated bond maturing in October 2028 was trading with a yield of 8.1 per cent on Tuesday, compared with a peak above 10 per cent in May.\u00a0<\/p>\n<p>Investors are also demanding a much lower premium to hold Turkish debt. The gap in yield between Turkish five-year dollar bonds and that on US Treasuries has dropped to 3.6 percentage points from a high of nearly 7 percentage points in May, according to LSEG data.\u00a0<\/p>\n<p>Turkey\u2019s new economic management team, led by finance minister Mehmet \u015eim\u015fek and central bank chief Hafize Gaye Erkan, has begun unwinding many of the unorthodox economic policies pursued by Erdo\u011fan prior to the election. <\/p>\n<p>The central bank has for example, hoisted interest rates from 8.5 per cent to 35 per cent, abandoning a years-long policy of holding borrowing costs low despite extreme inflation.\u00a0The government has also sharply increased taxes in a bid to cool down rampant consumer demand that had been fuelling very high imports.<\/p>\n<p>Both S&amp;P Global Ratings and Fitch Ratings increased their outlook on Turkey\u2019s credit rating to \u201cstable\u201d in September as a result of the new economic policy, although it remains well within junk territory. <\/p>\n<p>Many investors also remain deeply concerned over how long Turkey will stick with its new economic programme.\u00a0<\/p>\n<p>\u201cTurkey is a trade, not an investment,\u201d said Charlie Robertson, chief macro strategist at emerging markets focused fund manager FIM Partners. \u201cMarkets do like \u015eim\u015fek, they don\u2019t trust Erdo\u011fan, and the former outweighs the latter, for now.\u201d<\/p>\n<p>The person familiar with the deal, who asked not to be named, said investors remained worried about \u201cgeopolitical risks\u201d, especially given Erdo\u011fan\u2019s strong condemnation in recent weeks of Israel and its allies. <\/p>\n<p>Emirates, HSBC, JPMorgan, KFH Capital, and QNB Capital are joint lead managers on the sukuk deal, according to the term sheet.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/01e95aa9-ddee-410b-badf-0fec374dbde0\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Turkey has&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-10758","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Turkey raises $2.5bn in first deal on dollar bond market since April | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Turkey has raised $2.5bn in its\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=10758\" \/>\n<meta property=\"og:locale\" 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