The treasury with lead arrangers Commerzbank and WestLB launched a five- year, DM 1,000 million ($586 million) Eurobond issue on 3 June. The issue carries a coupon of 7.25 per cent.

Economics State Minister Ufuk Soylemez noted before the launch that the issue would be the largest for Turkey on the Deutschmark Eurobond market since 1993. When completed, the issue will mean the treasury will have sourced about $1,350 million of its $2,000 million-2,100 million of fresh borrowing requirements in 1997.

The institution’s most recent borrowing was a $400 million US dollar Eurobond arranged by J P Morgan and SBC Warburg, and completed on 23 May. This issue was priced at 348 basis points above US treasury notes.

Treasury sources say the institution would like to tap the Japanese samurai bond market to meet much of the remaining 1997 requirements, but that conditions such as spreads are not favourable in the Japanese market at present. The treasury may also consider bond issues in other currencies, such as the Swiss franc or Italian lira, the sources add.

Other local borrowers abroad are turning to the Deutschmark market, observers say. Osmanli Bankasi, for example, has issued DM 150 million

($88 million) worth of three-year bonds carrying a coupon of 8 per cent through the Frankfurt stock exchange, in a deal arranged by J P Morgan and United Bank of Switzerland.