Erdogan’s $2 Billion Reason to Thank the Saudis - Bloomberg

Erdogan’s $2 Billion Reason to Thank the Saudis - Bloomberg:

There are opportunistic financing deals, and then there’s Turkey. A $2 billion 10-year bond sale appeared out of nowhere for the country on Wednesday, with no roadshow and no prior announcement. But there was one big helping hand.

Saudi Arabia had just launched $7.5 billion of new 10- and 30-year notes and had elected for tighter pricing rather than raising a larger sum. This left a window for Turkey to present themselves to bond funds who were already looking at the Middle East, but who’d perhaps not been allocated enough from the heavily oversubscribed Saudi deal. Turkey’s timing was impeccable.

With a 7.625 percent coupon, its new 10-year paper looks generous to buyers on first glance, when you compare it to similar BB-rated sovereigns. But considering Turkey’s full-blown crisis in 2018, one might have expected it to be a lot higher. In the circumstances, it got this one one away easily and with a lower premium than you’d expect — even if there were a lot of Turkish buyers. Nearly 500 basis points over comparable 10-year U.S. Treasury debt may seem high, but credit spreads have widened everywhere recently.