Turkey is set to issue a record amount of international bonds in 2013 as the result of lower costs and the recent investment-grade credit rating for the country’s debt.
Over $3.1 billion in international debt was issued in 2012 by non-financial companies. That’s over ten times the amount issued in 2011.
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Of that amount, $1.2 billion was from Turkey. Momentum for Turkish bonds is expected to build out of anticipation of a second credit upgrade for the country’s debt to investment grade status during the first half of the year.
But the country is also subject to geo-political tensions and external imbalances. This could dampen investor appetite and make it difficult to finance the current-account deficit.
Turkey also has improving internal economics, having sold two power grids in Istanbul and Ismir for $3.2 billion. The sales may allow the country to meet goals for asset sales for the first time in four years and could go a long way toward closing the budget deficit.
Overall in 2012, Turkey has sold $11.2 of state assets but will also need funding from bond sales.