Sukuk Taking Flight as Airline Readies Debut Sale: Turkey Credit

Turkey’s Islamic bond market is gathering momentum as companies from the national airline to the biggest telephone operator plan offerings after the government sold its first local-currency sukuk.

Turk Hava Yollari AO, or Turkish Airlines, and Turk Telekomunikasyon AS have contacted banks that may be hired for a sale, people familiar with the matter said yesterday. The government raised 1.62 billion liras ($904 million) from its first sale of lira-denominated sukuk yesterday. The yield on its $1.5 billion debut sukuk sold Sept. 18 has dropped seven basis points to 2.95 percent yesterday compared with average yields of 3.15 percent for the Gulf Cooperation Council debt, based on data compiled by Bloomberg and the HSBC/NASDAQ Dubai GCC U.S. Dollar Sukuk Index.