Moody’s might lower Turkey

Moody's Investors Service said it placed the government of Turkey's Ba2 long-term issuer ratings, Ba2 senior unsecured bond ratings and provisional Ba2 senior unsecured shelf ratings on review for downgrade.

Concurrently, the agency placed on review for downgrade the Ba2 senior unsecured bond rating of Hazine Mustesarligi Varlik Kiralama AS, a special purpose vehicle wholly owned by the Republic of Turkey from which the Turkish Treasury issues sukuk lease certificates.

Moody's said the review reflects mounting uncertainty regarding the future direction of macroeconomic policy, in the context of the country's already vulnerable external position, that will, if sustained, raise the risk of severe pressures on Turkey's balance of payments to a level that is no longer consistent with the current rating.

Turkey's long-term country ceilings are not affected. The foreign currency bond ceiling remains at Baa3, foreign currency bank deposit ceiling remains at Ba3 and local currency country ceilings for bonds and bank deposits remain at Baa2. The short-term country ceilings are also unchanged at Prime-3 (P-3) for foreign currency bonds and Not Prime (NP) for foreign currency bank deposits.

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