Looking for opportunities in the domestic Turkish corporate bond market
Outstanding TRY-denominated bond issuance has reached TRY385bn as of February. While there were only a few issues before 2008 in Turkiye, total outstanding issues have soared to more than TRY380bn as of February 2024 in the TRY-denominated corporate bond market (CBM).
Solid business models that shield companies from fluctuations in the Turkish economy. Turkish companies have operated under formidable stress in the past. Despite this environment, they got through this period relatively unscathed thanks to their solid business models.
High yields and fluctuations in the Turkish economy discouraged companies from issuing more fixed-rate debt instruments. In the Turkish case, bond maturities are painfully short for such projects, as economic conditions fluctuate wildly across timeframes of 2-3 years and neither investors nor issuers want to find themselves locked into an unfavorable deal during these uncertain times.
We see selective value in bonds. With Turkiye returning to more orthodoxy, we believe there are opportunities to purchase bonds with attractive yields issued by high-quality companies that have worked through similar periods in the past and have shown their ability to navigate them successfully.