The upgrading of Turkey by ratings agency Moody’s has been welcomed by service providers such as Clearstream.
Following the announcement that Turkey has been upgraded to investment grade on May 16 2013, a Clearstream spokesperson commented: “The new investment grade status will no doubt boost interest in the Turkish capital market and we are there, ready to facilitate investment and access to and via this important market. Indeed, we are experiencing increased demand from investors and issuers world wide to access this market and equally, for Turkish market participants to be able to access the international debt market via our settlement link that covers all asset classes. Looking ahead, we will be reinforcing our collateral management services as demand for this in the Turkish market rises in line with a global trend for more collateral optimization to reduce risk in the markets.”
ICSD Clearstream has a direct market link with Turkey and has facilitated access for international investors and issuers to the Turkish domestic capital debt market for nearly 15 years.
Turkey is currently in discussions with Euroclear to begin trading through the ICSD’s settlement system. This could have the effect of driving down yields on Turkish bonds as much as two percentage points and to attract more foreign investors to the market. In an interview with Bloomberg, Istanbul Stock Exchange chairman Ibrahim Turhan said he hoped an agreement would be reached at the end of the year.
The agreement would allow the purchase of Turkish bonds via Euroclear without the need for a local brokerage account.