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Turkcell and Turk Telekom were upgraded by a notch to BB from BB- by S&P. The upgrade of both the issuers come on the back of Turkey’s upgrade by the rating agency last week. S&P rates both the companies higher than sovereign because they hold ~75% of their cash in hard currencies, which would help offset the impact of a weaker lira on foreign currency debt and capital expenditure. Both the companies have been put on a stable outlook reflecting the stable outlook on Turkey and expectations of their continued strong operating performance.
Dollar bonds of both the issuers traded stable, for instance, Turkcell’s 5.8% 2028s was at 97.4, yielding 6.66% while Turk Telekom’s 7.375% 2029s was at 102.2, yielding 6.77%.