Turkey's Akbank realizes first eurobond issuance

ANKARA

Turkey-based private lender Akbank announced on Wednesday that it was the first Turkish bank to issue eurobonds during the novel coronavirus pandemic.

"In this challenging period, we have successfully realized the first eurobond issuance of the Turkish banking sector," said Hakan Binbasligil, the bank's CEO, in a written statement.

Pointing out that Akbank made the opening of the eurobond market, he said that at a time when volatility was high in the markets, there was strong demand for the issuance.

The yield and coupon rate of transactions (issuance) worth $5.5 million with a maturity of 5.5 years was 6.80%, the statement said.

A demand of $1.5 billion, which was about three times the level expected, came for bond issuance that received great interest, it added.

This strong demand from investors is a result of the confidence in the growth potential of the Turkish banking sector, Binbasligil stressed.

"Our country, like the rest of the world, was naturally affected by this pandemic process. However, we see that the markets started to open with the support packages announced, the easing of the restrictions and other measures," Binbasligil noted.

What is a Eurobond?

A Eurobond is a debt instrument that's denominated in a currency other than the home currency of the country or market in which it is issued.

They are frequently grouped together by the currency in which they are denominated, such as eurodollar or Euro-yen bonds.

Since Eurobonds are issued in an external currency, they're often called external bonds.

Eurobonds are important because they help organizations raise capital while having the flexibility to issue them in another currency.