Turkey raises 1.6 bln liras in 2nd sukuk

ANKARA - Hürriyet Daily News

Total demand for the Treasury’s Turkish lira sukuk was nearly 3.28 billion liras. REUTERS photo

Turkey’s Undersecretariat of the Treasury raised 1.6 billion Turkish Liras in a lira-denominated sovereign sukuk (rent certificate) issuance late Oct. 2 and total demand was nearly 3.28 billion liras, the Treasury said in a written statement.

Turkey raised $1.5 billion through a dollar-denominated sukuk last month. The second issuance came as a success as the government diversifies its sources of financing by tapping into the global Islamic bond market.

The two-year lease sukuk will pay a lease return of 3.7 percent every six months.

The debut bond offering last month attracted an order book nearly five times the issue size.

“Participation banks have been expecting this instrument. It’s very attractive for participation banks, because it has a secondary market, and because of its zero risk from a capital ratio perspective,” the Turkish unit of Bahraini lender Al Baraka’s deputy chief executive Ayhan Keser said last month, according to Reuters.

“Participation banks” is a term used in Turkey to refer to Islamic-finance banks.