Istanbul to seek more foreign funding as Turkish banks won't help -mayor

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 Imamoglu said on Friday, days after it completed its first ever eurobond issue.

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 Imamoglu said on Friday, 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, Imamoglu said. The eurobond with a maturity of 5 years and 6.6% yield saw demand of more than $2.4 billion.

Imamoglu 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," Imamoglu told a news conference.

In June 2019, Imamoglu, from the main opposition Republican People's Party (CHP), inflicted a stinging defeat on President Tayyip Erdogan's AK Party when he was elected mayor in the city of 16 million people. He is seen by some as contender to challenge Erdogan 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 Erdogan's AKP and its Islamist predecessor party, Imamoglu 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."

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