Posted on 26 January 2010
The Turkish government has raised 934million Turkish lira from the sale of landmark 10 year bonds, which, by all accounts brought tremendous demand at auction.
Turkey’s bond issuance is not the first and it will not be the last such move as countries attempt to raise some much needed cash from capital markets, which are recovering much faster than government coughers, which have been left severely depleted — mostly from bailing out capital market players, but that is another story.
Where Turkey is different from most of the other bonds we have and will see issued from country’s in the region, is that Turkey is raising funds from a healthy financial standpoint, and selling bonds based on its own financial merit. Thus the successful sake us a testament to investors’ confidence in Turkey.
Take Hungary for example, it is expected to launch its own bond in the coming days, its bond will have a higher yield, but will be sold in the hope of lessening Hungary’s continued reliance on the International Monetary Fund. Regular readers of this blog, will know that Turkey has been standing on its own two feet, and without IMF assistance of any kind since May last year.
This is indeed a statement regarding investors’ faith in the Turkish government and economy; that it can sell such long term bonds with no IMF stand-by agreement in place — especially with the current level of risk-aversion in the international investment market place.