The treasury has mandated Japan's Yamaichi International to arrange a Y30,000 million ($357 million) Euro-yen bond issue with an expected maturity of three years to support the balance of payments. This will be the second borrowing by the treasury since the 1994 economic crisis. The first borrowing was a $500 million syndication in April (MEED 28:4:95).

The new issue is expected to be launched in mid-July, and to close by the end of that month, according to banking sources. The pricing has not been disclosed. The April syndication had an all-in cost of 345 basis points above the London interbank offered rate (Libor).

However, falling interest rates on private and public sector, short-term Turkish syndications since April, suggest a lower rate could be in prospect, bankers say. An important factor for the success of the bond issue may be revised risk ratings expected soon from the US ratings agencies Moody's Investor Service and Standard & Poor's (see below).