Turkey's Halkbank (HALKB) has sold $210mn of subordinated Additional Tier 1 (AT1) eurobonds (XS3314690176) at a coupon rate of 8.30% and a yield-to-investor of 8.301% (priced at 99.9976), the lender said on March 23.

AT1 bonds are perpetual. Halkbank’s paper is callable at the end of the 5th year. Turkish banks generally recall their subordinated papers after five years. They are supposed to provide a maturity date for registration purposes. The banks write in 10 years for AT1 papers.

Citi and ICBC Standard Bank acted as intermediaries in the deal.

Halkbank has a BB-/Positive rating from Fitch Ratings and a Ba3/Stable from Moody’s Ratings.

First stab at market amid dawn of renewed conflict

With the launch of the latest chapter in the US/Israeli conflict with Iran on February 28, Turkey’s credit default swaps (CDS) moved above the 300-level, while the yield on the Turkish government’s 10-year eurobonds moved above the 7%-level.

On February 13, Akbank (AKBNK) sold $600mn of an AT1 paper (XS3298828966 - US00971YAN04) at a coupon rate and yield-to-investor of 7.95% (priced at 100.00).

The paper was registered as the cheapest ever AT1 paper sold by a Turkish bank.

More on the way

Also on March 23, Halkbank said that it had decided to launch a global medium term notes (GMTN) programme to sell eurobonds/bills pm international markets and a diversified payment rights (DPR) programme to obtain securitisation loans from foreign lenders.

Happy ending

On March 9, Halkbank said that it signed a deferred prosecution agreement (DPA) in its favour with the US Attorney's Office for the Southern District of New York, a unit of the US Justice Department, in order to end a criminal case by means of a settlement.

Under the case in question, initiated around nine years ago, criminal charges were brought against Halkbank in 2019 in the US as regards an alleged involvement in a scheme that evaded American sanctions on Iran.

Halkbank has not admitted to any criminal wrongdoing and has not paid any judicial or administrative fines.

The US Treasury Department's Office of Foreign Assets Control (OFAC) has closed administrative processes that targeted Halkbank.

Access to overseas resources

“This development is expected to positively impact our Bank's financial structure thanks to the expansion of our Bank's access to overseas resources, correspondent banking network and international markets,” Halkbank said.

“Our Bank will maintain its activities in compliance with all local and international regulations and in a robust, trustworthy and seamless manner in the future just like it has done so in the past,” it added.

Done deal

On March 13, Halkbank said that the agreement with the US authorities had gone into effect.

Early birds

In June last year, Halkbank sold $700mn of a subordinated AT1 eurobond (XS3094751198) at a coupon rate of 9.30%.

The eurobond sale was Halkbank’s first since July 2016. Between July 2016 and June 2025, the lender remained out of the eurobond market. The bank also has no outstanding syndicated loan.

Also in June 2025, Fitch Ratings removed Halkbank from Rating Watch Negative (RWN) and assigned a stable outlook to the lender.

The rating agency recalled that the negative watch was assigned due to uncertainty over the timing and potential outcome of protracted US legal proceedings over the possible breach by Halkbank of US sanctions against Iran.

In December, Halkbank (HALKB) sold $300mn of an AT1 eurobond (XS3246998135) at a coupon rate of 8.90%.