Turkey is planning to sell an offshore sukuk for the first since March, despite rising borrowing costs globally and a series of credit rating downgrades, the latest being a cut to B by S&P. According to Bloomberg, they have hired banks like Citigroup, Dubai Islamic Bank, Emirates NBD Capital and HSBC Holdings as bookrunners to manage the issuance of the 3Y sukuk. Since the start of the year, they have already issued a cumulative amount of $5bn in February and March, with sufficient room to borrow more, with respect to their borrowing target of $11bn for the year. Mohammad Ahsan, MD of rates and fixed income at Mashreq Bank said, “A three-year sovereign sukuk is a rarity. It was a good move to shorten the tenor though Turkey will still need to pay a premium over secondary levels given the economic mismanagement…Islamic accounts especially funds who have liquidity will be keen on buying this one.”

Turkey’s bonds are generally trading lower, with its 7.25% 2027s falling 1.72 points to trade at 94.9 cents on the dollar, yielding 8.67%

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