The Chase Manhattan Bank has secured the mandate to arrange a medium- term note (MTN) borrowing for the treasury. This will be the first MTN programme for Turkey and is the largest in scale undertaken for an emerging market by the US institution. The treasury will probably not use the programme until September or October at the earliest, say Istanbul bankers. The treasury has at present no specific MTN transaction in mind for this year and is still reviewing documentation, they say.

The mandate provides for Chase Manhattan to act as arranger for MTN facilities totalling up to $1,500 million with a maturity spectrum of 30 years. However, it does not rule out approaches elsewhere for medium-term borrowing in other instruments, such as Japanese samurai or US Yankee bonds.

The treasury seeks to borrow a fresh $1,500 million-2,000 million for balance of payments purposes this year. It recently signed a three-year, Y 70,000 million bond issue with a coupon of 4.5 per cent arranged by Yamaichi International (MEED 10:3:95).

According to the mandate, Chase Manhattan will intermediate either requests for MTNs by the Treasury, or offers from prospective lenders, said bankers. The US institution suggested the programme to the Treasury after the success of a $500 million transaction signed in April. This includes a $255 million floating rate note (FRN), amortising in three, consecutive annual tranches.

The FRN is reported to be trading well in international markets with a $500 million transaction signed in April.