Bonds of Turkish banks plunged deeper into stressed territory as the lira’s 45 percent slump this year makes it more costly for lenders to repay dollar debts.
Nine bonds issued by Turkish banks listed in a Bloomberg Barclays index were trading below 80 cents on the dollar as of Monday, compared with just one a month ago. Bonds of Yapi Kredi Bankasi AS maturing in March 2026 were among the hardest hit, losing almost 30 cents on the dollar in the past week.
Maturity Wall
Turkish banks will have to service $7.6b bonds by the end of next year
Concern is mounting that Turkish lenders may struggle to find the capital to repay about $34.4 billion of bonds sold during a decade of rapid economic growth and historically low global borrowing costs. About a quarter of that total is due for repayment before the end of 2019, according to data compiled by Bloomberg.
“The view in the market has been that the Turkish banking sector is well capitalized and able to deal with short-term liabilities, but the more the lira falls, the more that comes into question,” said Diana Amoa, a London-based money manager at JPMorgan Asset Management. “Right now it seems the markets are trying to trade the potential for more financial stress but I don’t think we’re talking about banking-sector defaults yet.”
Originally Posted by yetkisiz
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