Turkey’s Treasury sold a €2bn eurobond (XS3293834662) due 2034 at a coupon rate of 5.15% and a yield-to-investor of 5.20% (priced at 99.667), the finance ministry said on February 4.

Deutsche Bank, HSBC, JP Morgan and Societe Generale acted as intermediaries in the deal.

In its last EUR-denominated eurobond auction held in July 2025, the Treasury sold a six-year €1.5bn eurobond (XS3123715297) at a coupon rate and a yield-to-investor of 5.20% (priced at 99.988).

In March 2024, the Treasury sold €2bn of six-year eurobonds (XS2790222116) at a coupon rate of 5.875% and a yield to investor of 6.125% (priced at 98.715).

Spreads fall

In the latest eurobond sale, the spread over the Mid-Swaps (MS) fell further to 242bp, the lowest level recorded in Turkey's euro auctions in 15 years. It declined from 280bp seen in 2025 and 341bp in 2024.

The yield at the latest auction was also below the fair value implied by the USD yield curve, the finance ministry noted, adding that the euro yield curve has been extended by approximately 2.5 years beyond its previous longest maturity of August 2031.

In its previous eurobond auction, the Treasury on January 7 raised $3.5bn from the sale of two eurobonds. The spreads over US Treasuries fell further to 245bp in the seven-year paper and 276bp in the 12-year paper from the 281bp seen in the previous auction held for an 11-year paper (US900123DS65) in November.

Prior to the appointment of the country’s current top officials for the management of the economy in June 2023, 500-600bp spreads were observed.

Turkey’s return to economic "orthodoxy" is one factor in securing the country's lower bond spreads, supported by global trends.

Turkey currently has a BB-/Positive rating (at three notches below investment grade) from Fitch Ratings, a Ba3/Stable (at three notches below investment grade) from Moody’s Ratings and a BB-/Stable (at three notches below investment grade) from S&P Global Ratings.

Turkey’s CDS remain above the 200-level, while the yield on the Turkish government’s 10-year USD-denominated eurobonds remains below the 7%-level.

€1.5bn redemption on February 16

On February 16, the Treasury will redeem a €1.5bn paper (XS1909184753), sold in July 2018 (just prior to the currency crash of August 2018) and paying a 5.20% coupon.

The authority has another outstanding euro paper (XS2361850527) due 2027. After February 16, it will have a total of four outstanding euro papers worth €7bn.

In 2026, the Treasury will redeem five papers worth $10.5bn in total. On January 26, it redeemed the first paper of the year (US900123DB31) worth $1.75bn.

So far this year, the Treasury has raised a combined sum of $5.9bn with three papers.

In 2025, the Treasury redeemed six papers worth $12bn. For three papers, it previously held tender offers. It has, meanwhile, sold six papers with a total worth of $13bn.