CEE & Turkey
After a slide on the lira in August 2018, followed by creeping inflation, Turkish corporates have had a rough year. One sector that has rode out the storm unscathed however, has been renewable energy developers. Bonds & Loans speaks with Hakan Aras, Chief Financial Officer for Borusan EnBW Enerji about ECA financing, Chinese investment and the company’s expansion plans.
A recent court ruling to reverse the National Bank of Ukraine’s decision to nationalise ailing lender PrivatBank sent the country’s banking system into disarray and even raised doubts over the country’s EU ascension prospects. The case, which some see as one of the first test-drives for the post-crisis era EU Bank Recovery and Resolution Directives, is significant not just for the country’s economy and its new president, Volodymyr Zelensky, but also for the European banking industry more broadly.
After enduring significant volatility in 2018, many Turkish corporates are struggling to keep their balance sheet in order and retain access to affordable financing. Some, however, like Turkcell – the country’s largest telecommunications operator – are bucking the trend. Bonds & Loans speaks with Osman Yilmaz, Chief Financial Officer of Turkcell about the company’s shift towards an asset-light business model, hedging strategies, and green borrowing.
10 Jul 2019
The government intends to foster growth of the local debt capital markets by hoovering up as much as HUF300bn worth of corporate bonds, but how the Central Bank’s recent hawkish signals and intent to load up the balance sheet squares with those plans is raising questions among investors.
Asian investors are being sought as natural candidates for a revival of foreign investment in Turkey, according to CFOs, bankers and investors who spoke with Bonds & Loans on a recent research trip to Istanbul. Whether investors in the Far East oblige is another question entirely.
Romania’s Eurobond, the largest ever from the country’s Finance Ministry and first EUR-denominated triple-tranche from a sovereign issuer in 2.5 years, has raised the stakes in the typically quiet CEE debt markets.
The Turkish economy appears to have overcome another perilous stretch of volatility, but in the absence of any structural reforms, and with continued reliance on foreign capital to sustain credit-driven growth, often in synchronisation with the political cycle, long-term prospects will remain hazy at best.
It has been a patchy year for Turkey – and for EM fixed-income more broadly – with both macroeconomic and geopolitical factors weighing on growth and market sentiment in the first half last year. But the last few months of 2018 have seen a quiet recovery take place, and while no one is expecting an easy ride in 2019, conversations at an exclusive Breakfast Briefing hosted by HSBC and Bonds & Loans at this year’s Bonds, Loans & Sukuk Turkey Conference in November suggest that windows of opportunity will present themselves to Turkish banks and borrowers.
The emergence of a ‘market-friendly’ candidate has become a regular feature in modern election campaigns. But often such candidates fail to deliver on their economic promises, either because of domestic political constraints, tough external conditions, or misplaced belief in their pro-market sentiment.
Against a fairly challenging market backdrop, borrowers in Turkey have pushed through with a number of landmark transactions in 2018 as they look to prioritize risk and liability management. With an economic recovery on the horizon, we speak Eda Tanyel, Head of Structured Finance at HSBC in Turkey about the credit market outlook for the remainder of the year and beginning of 2019, how corporates are overcoming external funding challenges, and the growing role of Asian investors in the region’s infrastructure pipeline.
- Rimrock Capital: “Concrete, realistic and credible policy needed to improve Turkey’s credit”
- Quick Take: Burcu Geris, Vice President and CFO, TAV Airports on the Markets, Treasury Objectives
- CASE STUDY: Turkcell Secures Hat-Trick of Currencies in CDB Loan Refinancing
- Investor: Turkey Has One of Lowest Debt/GDP Ratio’s in EM, but Inflation Still a Worry
- The Flipside of Turkey
12 Jul 2019