Jan 25 2018

Turkey’s Vakıfbank sold record amount of bonds despite U.S. tensions

Vakıfbank, a Turkish state-run bank, sold a record amount of bonds to investors in a transaction this week, despite political tensions with the United States over Turkey’s invasion of northern Syria.

The bank increased the size of the bond sale to $650 million and reduced the coupon payment to 5.75 percent due to demand for the debt, Dünya newspaper reported. It had originally planned to sell $500 million of the five-year bonds at 6 percent return. Demand, helped on by investor interest from the United States, exceeded $1.5 billion, Dünya said, citing CEO Mehmet Emin Ozcan.

Vakıfbank’s yield curve is about 20-30 basis points tighter than it was in the fourth quarter of last year when political tensions between Turkey and the United States increased, according to Global Capital, a news and data service for investors.

The record sale also follows the conviction in New York of Mehmet Hakan Atilla, deputy CEO of state-run Halkbank, on charges of evading sanctions on Iran. The guilty verdict against Atilla this month and the preceding trial has hurt Turkish banking stocks.