The government has announced the launch of a DM 500 million ($315 million) Eurobond issue with a maturity of seven years and a coupon of 7.75 per cent. The issue, lead managed by Commerzbank and Deutsche Morgan Grenfell, was well-received even though Moody’s Investors Service is considering the possibility of downgrading its credit rating.

Bankers say the success of the Deutschemark issue reflects the interest of expatriate Turkish investors in Germany and certain tax advantages for some buyers. These positive factors may not apply to the government’s next issue, expected to be of IL 500,000 million ($324 million) in five- year bonds. The government is planning to raise about $2,000 million this year from the international markets.