Feb 12 2019

Turkey hires Citi to sell lease certificates in latest foreign borrowing

Turkey will offer lease certificates on the international markets in a latest effort to drive down borrowing costs after a currency crisis last year.

The Treasury and Finance Ministry hired Citigroup, Standard Chartered and the Kuwait Finance House to sell the debt, according to a statement on its website on Tuesday.

Turkey is seeking to lower the cost at which it issues debt and diversify its borrowing. Treasury and Finance Minister Berat Albayrak, the son-in-law of President Recep Tayyip Erdogan, was tasked in July with running the country’s economy, a job subsequently made more difficult by a slump in the lira’s value, which has brought a surge in interest rates on local bonds and an economic contraction.

Turkey last borrowed in international markets in January, selling 1.25 billion euros of bonds due in March 2025. The debt carried a yield for investors of 4.75 percent.

As well as servicing existing debt and funding spending, the government is also looking for capital to inject into the country’s sovereign wealth fund, which is chaired by Erdogan with the assistance of Albayrak.

Turkey’s wealth fund has mandated Citigroup and the Industrial Commercial Bank of China to find financial institutions to lend 1 billion euros, Bloomberg reported earlier this month citing unidentified people. The loan will be used to inject capital into the fund’s companies, which comprise Turkey’s leading state economic enterprises such as Turkish Airlines.

https://en.hmb.gov.tr/duyuru/press-release-for-a-lease-certificate-issuance