The Republic of Turkey, with $6 billion or so to raise in the international bond markets in 2007 – by far the largest amount of any sovereign in the emerging Europe, Middle East and Africa region – could clearly have done with a good start to its funding programme.
In recent years, the borrower has done exactly that. In January 2006, for example, it launched a well-received $1.5 billion 2036 bond via Citigroup and Deutsche Bank – its longest-ever dollar bond at the time – attracting $6 billion of orders. The success of that one issue did much to enable it to return to the markets later in the year with a series of new issues and taps of existing transactions so that it could meet its $5.5 billion target for the year.
When Turkey launched a tap of its 2036 issue in January this year, alongside an add-on to a previous 2016 offering, the market reaction could scarcely have been more different. Having looked to get off to a flying start, the borrower crashed and burnt. Initially targeting a total fundraising in the $1.5 billion to $2 billion region, Turkey was forced to trim its sails when foreign investors in particular sat firmly on their hands when it came calling.