Turkish Banks Sell AT1 Bonds as Buffer Against Volatile Lira

Source:Bloomberg Date:27Mar2024

Yapi Ve Kredi Bankasi AS is set to become the third lender from Turkey to raise AT1 capital this month after offering a US dollar-denominated bond on Tuesday, with initial price talk of around 10%, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it.

Turkey’s Akbank TAS raised $600 million earlier this month with an AT1 that was priced at a yield of 9.369%, down from initial talk in the low-10% area. An issuance by Turkiye Sinai Kalkinma Bankasi AS’s yield also tightened from a similar guidance.

Turkish banks’ series of deals come at the tail end of what is set to be the busiest quarter of AT1 issuance since late 2019, with $18.7 billion in global sales since the start of the year, according to data compiled by Bloomberg. Meanwhile, lenders have been exercising options to repay their older notes early, giving portfolio managers more cash to feed supply.