(Bloomberg) -- JPMorgan Chase & Co. and HSBC Holdings Plc were among banks hired by Istanbul to help sell its second Eurobond in three decades, according to people familiar with the matter, days after the Turkish government's largest-ever overseas debt placement.
The municipality also mandated ING Groep NV and Societe Generale SA to borrow around $260 million by issuing a bond with a maturity of at least five years, said the people, who asked not to be identified because the deliberations are confidential. In 2020, Turkey's biggest city sold a $580 million Eurobond for the same duration.
Istanbul metropolitan municipality officials and the Treasury and Finance Ministry declined to comment. JPMorgan, HSBC and Societe Generale also declined to comment. ING didn't respond to a request seeking comment.
The showdown between Russia and the West over Ukraine has spooked credit markets in the U.S. and Europe and may yet pose a risk for Istanbul's plans even after Turkey borrowed a record $3 billion last week. But a flurry of dollar bond sales in Asia in recent days shows issuers may have a window of opportunity given the drop in U.S. Treasury yields due to Ukraine tensions.
Istanbul, which has the same long-term rating from Moody's Investors Service as the sovereign, is returning to the debt market to help fund its massive investments. Proceeds from the bond sale will be used to finance two metro lines, the people said.
The municipality has received the required approvals from the Treasury and Finance Ministry for the Eurobond, they said. The markets regulator already signed off in October on the city's plan to raise as much as $354 million abroad.
Capital Needs
Facing rapid urbanization in a city of more than 16 million people, the municipal government is looking for fresh capital to meet the infrastructure needs of a metropolis that contributes nearly a third to the national economic output.
Under Mayor Ekrem Imamoglu, a member of the main opposition Republican People's Party, Istanbul has in the past struggled to win approvals from the ministry, controlled by President Recep Tayyip Erdogan's government.
Seen as a potential contender in next year's presidential elections, Imamoglu complained that state lenders had “shut the doors” on the city's administration before the municipality's last Eurobond sale.
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