No-interest bond sale disappoints Treasury
Güncelleme Tarihi:
Daily News with wires
Oluşturulma Tarihi: Ocak 30, 2009 00:00
ISTANBUL - The Turkish Treasury said on Wednesday it issued 420.7 million Turkish Liras ($261 million) and $49.1 million in revenue-indexed bonds in a direct sale to banks, far below an official expectation of a 1.89 billion liras.
The lira bond has a three-year and three-month maturity and the dollar bond has a maturity of three years and six months. The bond is considered an "Islamic bond" as it does not rely on interest rates but rather the income from state-owned institutions. The Treasury had said the new bonds are part of an effort to diversify borrowing instruments.
"Clearly this issue did not turn out the way that the Treasury wanted," Reuters quoted a fixed-income trader. "Expected sales were 1.89 billion liras, but the sales were only around a quarter of that. It could be that investors were cautious on an investment vehicle that was being issued for the first time."
The Treasury said previously it had expected to sell 1.89 billion liras in the revenue-indexed bonds, and the bond is linked to revenues of Turkish Petroleum Corporation, or TPAO, the State Airport Authority and similar state bodies.
"Some Gulf investment was expected in the issue, but as of yet we don't know how much demand came from the Gulf," the trader told Reuters. Speaking to Milliyet newspaper, bankers who requested anonymity said they also did not find the issuance "bright." The bonds mainly targeted capital from Gulf countries they said, adding that they do not have knowledge on how much was bought by foreign investors.
Some analysts speaking to Reuters criticized the Treasury for lack of promoting the bonds. The bond issue was announced six days prior to the auction, as opposed to a usual four weeks.
"Clearly this issue did not turn out the way that the Treasury wanted," Reuters quoted a fixed-income trader. "Expected sales were 1.89 billion liras, but the sales were only around a quarter of that. It could be that investors were cautious on an investment vehicle that was being issued for the first time."
The Treasury said previously it had expected to sell 1.89 billion liras in the revenue-indexed bonds, and the bond is linked to revenues of Turkish Petroleum Corporation, or TPAO, the State Airport Authority and similar state bodies.
"Some Gulf investment was expected in the issue, but as of yet we don't know how much demand came from the Gulf," the trader told Reuters. Speaking to Milliyet newspaper, bankers who requested anonymity said they also did not find the issuance "bright." The bonds mainly targeted capital from Gulf countries they said, adding that they do not have knowledge on how much was bought by foreign investors.
Some analysts speaking to Reuters criticized the Treasury for lack of promoting the bonds. The bond issue was announced six days prior to the auction, as opposed to a usual four weeks.