The government is to issue a $400 million international bond issue at the end of August. Guaranteed by the The Export-Import Bank of the US (Ex-Im Bank), the 10-year bond will be lead managed by Chase Manhattan Bank.

Proceeds of the issue will replace an existing bridge facility provided by Ex-im bank supporting the purchase of 45 Black Hawk helicopters from the US' Sikorsky Aircraft, bankers say.

Little difficulty is expected in selling the instruments, as they will be guaranteed by Ex-Im Bank, carrying the implicit triple-A rating of the US government, and will involve no Turkish risk. Pricing on the fixed- rate issue has not been decided.

The purchase of the helicopters is the first phase of a project signed up in late 1992 with Sikorsky Aircraft, a subsidiary of the US' United Technologies Corporation (MEED 18:12:92). The optional second phase involves joint production in Turkey of a further 50 helicopters, probably with Turkish Aerospace Industries, which already makes F-16 jets under licence from the US' General Dynamics at Murted outside Ankara.

Work on the second phase will probably start in 1995, if the government decides to go ahead following consultations with the IMF on the project's potential effects on the economic recovery programme. The combined cost of the two phases is about $1,100 million.