Turkey's sovereign wealth fund, Turkiye Varlik Fonu Yonetimi, Istanbul, is planning to sell eurobonds for the first time after ramping up investments in strategic assets, according to people with knowledge of the plan.
The fund is considering an issuance later this year of at least $2 billion and will soon choose about half a dozen banks to help arrange the deal, said the people, who asked not to be identified as talks are confidential. The fund and the arrangers will then determine the maturity of the bonds and the exact amount, they said.
The wealth fund — which is assessed three levels below junk by Fitch Ratings with a stable outlook — is working on getting a grading from a second international rating firm, the people said. A spokesman for the fund declined to comment.
The fund has $222 billion in assets, according to the Sovereign Wealth Fund Institute.
CEO Zafer Sonmez, who in May 2019 told the Dunya newspaper that the fund would prepare a bond-issuance program, is weighing a sale as central bank stimulus spurs a global rally in junk bonds. That has seen firms from casino operators and retailers to lenders and restaurant owners across the U.S., Europe and Asia borrow fresh funds to benefit from lower borrowing costs.
It also comes amid a string of purchases by the wealth fund, including this week's announcement that it is acquiring a 26.2% stake in Turkey's biggest cellphone operator for $530 million. The fund has invested 6.5 billion Turkish lira ($948 million) in state-owned insurance firms, and bought a 36% stake in Turkiye Vakiflar Bankasi TAO in a rights offering. It has also funded part of a government project to build a financial center in Istanbul and a 10% stake in Borsa Istanbul.
If completed, the bond sale would follow a 2-year syndicated loan of €1 billion ($1.1 billion) in 2019. Industrial Commercial Bank of China and Citigroup acted as bookrunners on the loan, while HSBC Holdings was the credit representative.