Treasury unveils financing program for 2020

ANKARA

The Turkish Treasury and Finance Ministry has unveiled its financing program for 2020.

The ministry projects that total amount of debt service will be 352.1 billion Turkish Liras, comprising the payments of 222.6 billion liras in principal and another 129.4 billion liras in interest.

“Total domestic debt service is expected to realize as 287 billion liras while total external debt service is expected to realize as 65.1 billion liras,” the ministry said in a statement.

The ministry plans a 299.6 billion lira of domestic borrowing for next year.

The statement added that the Treasury plans to raise $9 billion equivalent external funding in 2020 through bond issuances from international capital markets.

“In addition to bond/lease certificate issuances, the total amount of external financing is planned to reach at most $9.6 billion via project and program loans from international financial institutions,” it said.

According to the ministry, the main pillars of borrowing strategies for 2020 are to borrow mainly in Turkish liras, borrow in foreign currencies besides the U.S. dollar in international markets for market diversification, keep the share of debt maturing within 12 months, and keep a certain level of cash reserve in order to reduce the liquidity risk associated with cash and debt management.

The ministry noted that the average maturity of cash domestic borrowing, which was 59.3 months in 2018, came down to 28.2 months in the period of January and October 2019 while the average cost of fixed-rate domestic borrowing, which was 17.5 percent in 2018, was realized as 20.2 percent in the first 10 months of this year.

Depending on the redemption profile in 2020, the lira denominated fixed-rate coupon bonds with various maturities will continue to be issued as “benchmark bonds,” the statement added.

Turkey forecasts foreign debt payment of $11.3B in 2020

The Treasury and Finance Ministry is forecasting 65.1 billion Turkish Liras ($11.3 billion) in external debt payments in 2020.

The total amount of debt service is estimated at 352.1 billion Turkish liras ($61 billion) for next year, the Treasury Financing Program said.

The ministry said it expects total domestic debt service to hit 287 billion liras ($50 billion).

The principal payments would total 222.6 billion Turkish liras ($39 billion) with interest at 129.4 billion Turkish liras ($22.5 billion).

"The total non-borrowing resources including the cash primary surplus, privatization revenues, the revenues from 2-B land sales, the Savings Deposit Insurance Fund transfers, receipts from on-lent and guaranteed debt and use of cash account are minus (-) 5.1 billion liras," it said.

The ministry plans to borrow $9 billion equivalent foreign funding next year through bond issuances in international capital markets.

"The total amount of external financing is planned to reach at most $9.6 billion via project and program loans from international financial institutions," it said.