Istanbul Mayor İmamoğlu looks to global markets 'as Turkish banks won't help'

Istanbul Mayor Ekrem İmamoğlu has said that he is forced to seek loans from abroad as Turkey's state-owned banks closed their doors to the municipality. Speaking at a press conference in Istanbul, İmamoğlu said that the municipality exported its first eurobond to international capital markets to fund its new infrastructure projects.

Duvar English - Reuters

Istanbul's municipality will issue new bonds or seek other foreign financing for major projects as Turkey's state banks refuse to extend loans, mayor Ekrem İmamoğlu said on Dec. 4, days after it completed its first ever eurobond issue.

The $580 million financing secured in the eurobond this week will be used to complete four subway projects around Istanbul, İmamoglu said. The eurobond with a maturity of 5 years and 6.6% yield saw demand of more than $2.4 billion.

İmamoglu said the municipality only resorted to foreign financing after repeated requests to obtain funds from Turkish state banks failed to produce results.

"Our relationship with foreign financing sources will continue. This could be another bond issue, project financing or another instrument," İmamoglu told a news conference.

In June 2019, İmamoglu, from the main opposition Republican People's Party (CHP), inflicted a stinging defeat on President Receğ Tayyip Erdogan's ruling Justice and Development Party (AKP) when he was elected mayor in the city of 16 million people. He is seen by some as contender to challenge Erdoğan in 2023 presidential elections.

After the election, Turkish state banks abruptly stopped extending loans to the municipality, which had been held for 25 years by Erdoğan's AKP and its Islamist predecessor party, İmamoglu said.

"We would not want to be too keen on foreign financing. Of course we want to benefit from domestic resources at the maximum degree. But it is obvious that there are obstacles before this in the current political environment," he said.

"But if any domestic opportunities arise, we would use it."