Recent development

On November 27, 2015, the Capital Markets Board (the “CMB”) published draft amendments to the current Debt Instruments Communiqué (the “Draft Communiqué”). Under the Draft Communiqué, issuers will be required to demonstrate greater financial strength than previously required or, alternatively, provide payment guarantees. The Draft Communiqué is available on the CMB’s website for public comment until December 18, 2015.

What the CMB proposes

If the CMB adopts the Draft Communiqué in its current form, new rules will apply to the domestic and cross-border issuance of debt instruments:

  • An issuer must obtain a credit rating for domestic debt issuances and maintain that rating for further debt issuances under the same CMB approval.
  • An issuer will be required to provide a bank guarantee for principal and coupon payments if: (i) its credit rating is below the top three investment grades for public offerings of debt instruments, (ii) its credit rating is below investment grade for domestic debt instrument issuances to qualified investors, or (iii) it has a fourth level investment grade credit rating and its financial condition (in terms of net profit, cash flow and equity) does not satisfy the thresholds as of the application submission date for domestic debt instrument issuances to qualified investors.
  • Only bank guarantees will be permitted. Currently, non-bank parties can provide guarantees for principal and coupon payments.
  • All issuers will be able to buy back and sell their debt instruments on the secondary market, which is currently limited to banks. Buy-back and sale prices will need to be disclosed on the issuer’s website.
  • Private placements of debt instruments, which are not currently subject to a threshold, will be required to have a nominal value of at least TRY100,000 for each private placement.
  • General assembly or board resolutions in relation to debt instrument issuances will be required to be in the CMB standard form, which has not yet been issued.
  • Issuers will not be required to register their cross-border debt instrument issuances with the Central Registry Agency (the “CRA”), i.e., the central securities depository for dematerialized securities, and will only be required to notify the CRA. Currently, debt instruments issued abroad must be registered with the CRA.
  • If the upper limit of a multiple issuance program is denominated in TRY for cross-border offerings, the exchange rates for separate issuances within a program will be recalculated at the current exchange rate just prior to each issuance. Previously, the exchange rate for an offering program was fixed for the entire program.
  • After obtaining a CMB-approved issuance certificate, issuers will be able to offer cross-border debt instruments by simply notifying the CMB electronically of each issuance covered by the CMB certificate. The requirement to obtain a physical CMB approved issuance certificate for each cross-border debt instrument issuance within a program will be abolished.


The CMB is proposing to tighten the issuance of debt instruments by introducing mandatory credit ratings and guarantees to protect investors in the market. While the CMB is performing its duty to protect investors, these requirements could reduce Turkish debt offerings by disincentivizing companies in Turkey to issue debt instruments. At the same time, the CMB is proposing to relax the procedural requirements for cross-border debt instrument issuances, allowing more Turkish issuers to seek debt financing abroad.

Please contact Daniel Matthews and Muhsin Keskin if you have questions about how these changes might affect your company.


Muhsin Keskin leads the Istanbul office’s Banking and Finance and Capital Markets Practices. Muhsin also advises clients on various aspects of mergers and acquisitions including private equity investments.