Turkey has hired banks including HSBC to manage an issuance of Sukuk or Islamic debt that could launch as soon as this month, as per people familiar with the matter, Bloomberg reports. The sources added that the issuance could be to refinance ~$2bn of debt that is maturing this month. However, no decision has been made and the plans could be shelved if market conditions deteriorate, the sources said. This would be the first issuance since September last year, after which the Turkish lira took a beating on President Erdogan’s push for lower interest rates despite high inflation. The lira lost about 35% of its value against the US dollar in the last quarter of 2021, which dragged the sovereign’s dollar bonds lower as well. Turkey’s 5.875% 2031s have fallen from 94.4 levels in end-September to 86.47 cents on the dollar currently to yield 7.95%.
In related news, Qatar is also said to be engaging with banks for a potential syndicated loan or bond issuance to refinance about $11bn of debt that is due next year, as per people familiar with the matter. However, no final decision has been made nor are any details of the issuance available. Qatar’s 3.75% 2030s traded ~0.8 points lower to 109.08 yielding 2.51%.