Euro Denominated Sukuk follows recent CPI linked Issuance in Turkey

Turkiye Finans planned EURO denominated sukuk along with a recent indexed linked sukuk by Kuveyt Turk illustrates a maturing market in Turkey.

In recent regulatory filings made with the Turkish Capital Markets Board, Turkiye Finans through its subsidiary TFKB Varlik Kiralama announced plans for a EURO denominated Sukuk.

In a separate filing Aktif Bank through its subsidiary Aktif Bank Sukuk Varlık Kiralama announced a planned 100 million Turkish Lira denominated Sukuk.

Sukuk in Turkey are issued as Rental certificates due to Turkey’s secular constitution.

Maturing Sukuk Market in Turkey

The hard currency EURO Sukuk by Turkiye Finans represents the first EURO denominated Sukuk in Turkey, though a number of US Dollar Sukuk have been issued previously, most recently by a Turkish based subsidiary of Kuwait Finance House (Kuveyt Turk) which issued a $350 million Sukuk in February 2016.

Kuveyt Turk also recently issued an innovative CPI linked Sukuk, the first of its kind in Turkey. The small 10 million Turkish Lira private issue provided investors protection against rising inflation in Turkey.