A report that will be released by Standard and Poor's this week states that two Turkish deals, Credit Card Receivables Trust 1998-1, issued by Turkiye Garanti Bankasi, TAS and Akbank 2001-A Receivables Trust, issued by Akbank TAS, are currently performing quite well, despite the negative impact the recent terrorist attacks on the U.S. could have on their credit quality.

Since September 11, 2001, there has been a significant decline in tourism to Turkey, and travelers that have ventured to Turkey since the attacks have been from less-affluent nations. The tourism rates to the country are said to have dropped 9.5% in October 2001 compared to a year ago, which, according to the rating agency, represents a significant loss of both hard currency funds and credit card-related funds.

Despite this impact, the two triple-A rated deals, which feature financial guarantees from MBIA Insurance Corp., are on schedule with debt payments. "The decline in tourist visits and expenditures since Sept. 11th does not appear to be a current threat to the payment of scheduled debt service, although the ratio of receivables generated to quarterly debt service due on the transactions has declined modestly," the report states.

The report also warns that increased political violence in the Middle Eastern region or additional terrorist attacks, which would cause a further decline in tourism to Turkey, could prove problematic in the near future.

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