Turkish Treasury to Issue 3.7 Billion Euro Debt to Boost State Lenders' Capital

Turkey’s Treasury will issue 5-year debt instruments worth a total of 3.7 billion euros to strengthen the capital of state banks, it said on Monday. Last week, Turkish state-owned lenders Ziraat Bank and Vakifbank said they had completed pricing of perpetual bonds, which will be used to strengthen capital, while Kalkinma Bank and Eximbank authorised headquarters to seek loans to boost their capital, Reuters reported. After last year’s currency crisis - in which the lira shed around 30 percent of its value against the U.S. dollar - Turkey’s state banks began actively providing loan restructurings to companies and spreading low-interest credit to individuals as part of a broader government effort to stem the damage. The government debt securities will be issued to the Market Stability and Balance Fund (PIDF) owned by Turkey’s Wealth Fund, the treasury said, adding that the fund would sell the securities to state lenders and in return buy banks’ perpetual bonds or provide loans to strengthen their capital. Read more