Turkey's Treasury holds auctions to borrow $880M

By Muhammed Ali Gurtas

ANKARA

Turkey’s Treasury borrowed 3.33 billion Turkish liras ($880 million) from domestic markets, according to an official statement Tuesday.

The first auction was held for 10-year fixed coupon bonds (semiannually, re-open, fifth issue), which amounted to 1.84 billion Turkish liras ($486 million), the Treasury Undersecretariat announced.

The government bonds will be settled on Wednesday and mature on Aug. 11, 2027, while the total tender was 4.03 billion Turkish liras ($1.06 billion) with a 45.6 percent accepted/tendered rate.

The interest rate of the 10-year bonds was accepted at a 5.92 percent term rate, with annual simple and compound interest rates of 11.84 and 12.19 percent, respectively.

At Tuesday's second auction, the Treasury borrowed 1.49 billion Turkish liras ($394 million) by issuing 10-year CPI-indexed government bonds (semiannually, new issuance), which will be settled on Wednesday and mature on Jan. 12, 2028.

According to the statement, the total tender for the government bonds was 3.11 billion Turkish liras ($822 million), with a 47.8 percent accepted/tendered rate.

The undersecretariat said the term rate of 10-year bonds was accepted at 1.45 percent, while annual simple and compound interest rates were 2.90 and 2.92 percent, respectively.

Meanwhile, the Treasury announced on Monday that Turkey's central government's gross debt stock -- the outstanding debt of public sector institutions, the Central Bank, private companies, households -- rose 15.4 percent year-on-year to reach 876.5 billion Turkish liras (nearly $231.3 billion) at the end of 2017.

In early January, an official statement said Turkey's Treasury posted a cash balance deficit of 60.45 billion Turkish liras ($16.1 billion) in 2017, while its interest payments, in the 12-month-period, were 55.47 billion Turkish liras ($14.78 billion) -- making it the top contributor to the balance deficit.