Turkey's Akbank Hits U.S. Market With $1 Billion Bond Deal

   By Patrick McGee 
 

Turkish lender Akbank T.A.S. (AKBTY, AKBNK.IS) tapped the U.S. bond market for $1 billion Monday, paying a lower cost than prior deals even as it borrowed for a longer period.

Foreign companies are increasingly coming to the U.S. market to take advantage of a large investor base searching for yield. The U.S. market can typically handle bigger deals than other markets, helping to reduce borrowing costs even though foreign companies often pay more than U.S. companies.

Turkish companies had already sold a record $8.9 billion in the U.S. debt markets this year, according to data provider Dealogic. The prior record was $6.6 billion, from 2005. Last year, just $4.7 billion was sold.

Akbank--which means "White Bank"--sold $500 million worth of 3.875% coupon, five-year bonds Monday at a yield of 3.948%, or 3.281 percentage points more than Treasurys, and $500 million of 5% coupon, 10-year bonds at a yield of 5.129%, or 3.452 points over Treasurys.

That compares with a 6.5% coupon on seven-year bonds sold in March 2011, and 5.125% on five-year bonds sold in July 2010, according to Dealogic.

The latest bonds were rated Baa2 by Moody's Investors Services and BBB-minus by Fitch Ratings.

Bank of America Merrill Lynch, Citigroup, HSBC, J.P. Morgan Chase & Co. and Societe Generale were lead managers on the deal.

Write to Patrick McGee at [e-mail]