Turkey's auction results announced: long-term fixed-rate bonds oversubscribed with a 35% yield

⑴ On Tuesday, Turkey’s Ministry of Finance completed multiple bond reissuances, raising approximately 200 million lira in net financing through inflation-linked bonds maturing in May 2030, with a real yield of about 5.8%. ⑵ On the same day, fixed-rate bonds maturing in September 2035 were reissued, with the winning yield reaching 35.1% and approximately 36.4 billion lira in net financing obtained, indicating strong market demand for high-coupon assets. ⑶ In the non-competitive bidding stage before the auction, the long-term fixed-rate bonds received subscription bids totaling about 57.4 billion lira, while the issuance to state institutions was 4 billion lira. The bid multiple reflects a high level of institutional participation. ⑷ For the inflation-linked bonds, the total amount of non-competitive bids was approximately 8.8 billion lira, and the sales volume to state institutions was also 4 billion lira, showing relatively steady demand structure. ⑸ Against the backdrop of high inflation and expectations for lira depreciation, a nominal yield above 35% highlights the market’s risk pricing for Turkish lira-denominated assets. Going forward, attention should be paid to the lira’s exchange rate movements and the impact of central bank policies on bond valuations.