Turkey: Simsek Sees ADQ Bond Sale By End of 2024 - Bloomberg

Turkey: Simsek Sees ADQ Bond Sale By End of 2024 - Bloomberg

Turkey is nearing its inaugural bond sale to an Abu Dhabi sovereign wealth fund by the end of this year, a milestone for Turkish policymakers trying to regain foreign investor confidence after years of mistrust.

The government will likely offer 10-year bonds in tranches to ADQ, owned by the oil-rich capital of the United Arab Emirates, Turkey’s Treasury and Finance Minister Mehmet Simsek told Bloomberg on Thursday.

The expected transaction marks the beginning of what’s likely to be the biggest flow of capital into Turkey’s $1 trillion economy from the Middle East petrostates. The UAE and Saudi Arabia have both expressed interest in investing, following a policy makeover that’s brought Turkey’s era of cheap money to an end under Simsek, who was appointed in June. At the same time, President Recep Tayyip Erdogan boosted ties with regional heavyweights and led the outreach to oil producers.

“We don’t have to spend it immediately,” Simsek said of the likely proceeds from the expected sale. “Therefore, we may benefit from this opportunity partially before the end of this year.”

Simsek’s comments boosted the nation’s equities and domestic debt. The benchmark Borsa Istanbul 100 index rose as much as 1.2%, led by a 2% surge in the banking index. The yield on two-year lira notes fell from an intraday high of 41.6% to 41.17% as of 4:55 p.m. in Istanbul, though it was still six basis points higher than Thursday’s close.

The ADQ funds will be used to finance reconstruction efforts in Turkey’s southeastern provinces that were struck by two powerful earthquakes in February.