Increase in defaults and foreign outflow in Turkey's private sector bond market
Following the fund crisis in Turkey, defaults in the private sector bond market have increased, while foreign investors sold $1.3 billion. The CBRT aims to support the market by exempting loans used for bond redemptions from loan growth limits.
Affected by tight monetary policy and macroprudential measures, the bond market—to which companies turned as a non-bank financing instrument—is going through a challenging process following the recent fund crisis. As of October 16, the domestic bond issuance stock of non-general government sectors was recorded at 992.8 billion liras.
Following the fund crisis, Tarfin Tarım, Alnus Yatırım, Alves Kablo, Fikret Petrol, and Ata Varlık Kiralama failed to make their bond payments and went into default. Meanwhile, Zorlu Energy requested a restructuring for its eurobond payment. Since September 15, foreign investors have carried out over $1.3 billion in sales of private sector bonds.
The CBRT aims to facilitate companies' access to financing by exempting loans used for bond redemptions from banks' loan growth limits. Assessment: While experts do not expect problems in large companies, they anticipate that liquidity and refinancing risks for small-scale companies will persist.
Sources
- ekonomigazetesi.com · Link