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Turkey has put an $8.5bn sukuk deal with the UAE on hold amid cheaper funding alternatives in the global bond markets. As per sources, the yield demanded by UAE’s Abu Dhabi Development Holding Co. (ADQ) was unfavorable. In November 2023, the Turkish Finance Minister said that the inaugural bond sale to ADQ would begin by end-2023 with the deal expected in tranches. This was part of Turkey’s funding efforts for rebuilding due to the twin earthquakes last year that had an estimated damage of over $100bn. It was noted that the earthquake-related spending was moving slower than expected, adding to the reasons why the funding was not immediately necessary. In July 2023, the UAE had committed to investing over $50bn in Turkey’s economy. It is to be noted that Turkey recently priced a 10Y dollar bond at 7.875%, lower than the previous year’s issuances for instance where in November, they priced a 5Y sukuk at 8.5%. Sources note that the debt deal with the UAE has not been completely ruled out and that it could happen in the future.
Turkey’s dollar bonds were trading steady with its recently priced 7.625% 2034s currently trading 98.87, yielding 7.79%.
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