Author: Anita Hawser

In EU accession countries such as Turkey, eurobond sovereign order books are being met with strong investor interest. “The pull towards EU membership is going to make Turkey increasingly attractive,” says Martin Hibbert, managing director, Deutsche Bank. Turkey’s recent E1 billion, 12-year sovereign bond lead managed by Deutsche Bank and UBS constituted the strongest domestic response for a euro sovereign issue.

With the advent of the euro as a full-fledged currency, Hibbert says more investors have switched out of equity into debt. “The sheer weight of demand means people are more credit aware, and you are seeing investors that bought AA four years ago now buying BBB rated.” The markets hope investor response to sovereign issuance in markets such as Turkey, the Czech Republic and Poland will encourage corporates and banks in these markets, which normally raise money via the syndicated loan market, to issue eurobonds. “In emerging markets generally, there really hasn’t been a lot of corporate issuance,” notes Hibbert. “I expect corporates will start to issue as well.”

Anita Hawser