U.S. investors may be sated with turkey so soon after Thanksgiving, but the eponymous country is providing plenty to nibble on.

Turkiye Is Bankasi (Isbank) is readying a $350 million deal backed by credit cards - a sporadically tapped asset class in the country - while peer Turkiye Garanti Bankasi (Garantibank) closed last Wednesday a $525 million deal backed by diversified payment rights. Meanwhile, Akbank is working on a $600 million credit card deal, sources said.

At least part of the proceeds of the deals are understood to be effectively refinancing structured transactions issued before August 2004, when Standard & Poor's upgraded a stable of Turkish banks, enabling them to hit investment grade on a securitized basis. This turned out to be a pivotal moment in the asset class's history, opening the door to a queue of monoline insurers eager to scarf down Turkish exposure.

The Isbank transaction is split into an A tranche for $225 million and a B tranche for $125 million. Wrapped by FGIC, the B tranche has a final maturity of nine years and average life of 5.1. The A tranche, which is unwrapped, has a final maturity of 11 years and average life of seven. Moody's Investors Service and S&P have respectively rated the A series Baa2' and BBB-' and the B series Aaa' and AAA.' Citigroup Global Markets is the sole lead.

"Strategically this is for Isbank to increase the program, lengthen [its debt] maturity and have a more efficient cost structure," said a source close to the deal. The transaction also takes FGIC a step deeper into Turkish territory - the monoline insurer made its emerging market debut in the public market only last Sept. with a deal for Garantibank.

A portion of the proceeds will go to pay back a $150 million in loan notes backed by credit card receivables, according to sources. Led by WestLB, the deal headed for retirement closed in February 2004, according to a source familiar with the sector. That came six months before the S&P upgrades. Isbank was, in fact, the first Turkish bank to earn an underlying investment-grade rating from S&P in the public market, when it placed a $500 million DPR deal in November 2004.

Credit card transactions out of Turkey have been drops in the bucket compared to the DPR transactions pouring forth this year. Part of the reason is a simple question of volume, with the former asset dwarfed by the latter, sources said. But also, securing acknowledgment for a deal from MasterCard International can be an uphill battle, sources said. "MasterCard doesn't like doing these deals," said one source with experience in the sector. The hurdles thrown up the card issuer have actually helped convince some originators, like Banco de Credito del Peru and Garantibank, to let their credit card securitization programs expire, the source said.

The upcoming Isbank deal securitizes all existing and future international credit card and debit card payments by Mastercard, Visa International Service Association, Maestro, and Cirrus System. These payments come from Isbank's acquisition of merchant vouchers that are created when foreign visitors in Turkey make a purchase with a corresponding credit card.

One of the leading acquirers of international credit card vouchers in Turkey, Isbank holds a 14% share of the market, according to an S&P report.

Meanwhile, Garantibank closed a $525 million DPR deal via joint leads ING and ABN Amro. The deal comes off an existing program and contains G, H and I tranches. The G series is $150 million, with a final maturity of seven years and an average life of 5.1. The H tranche is $250 million, with a final maturity of eight years and an average life of 5.6. The I tranche is $125 million, with a final maturity of eight years and an average life of 5.1 years. ING arranged the G and H tranches, ABN handled the I notes, which are unwrapped.

CIFG North America Assurance wrapped the G tranche while XLCA wrapped the H notes. The deal was structured as a standard DPR, according to a source familiar with the transaction. Pricing was undisclosed.

Moody's and S&P rated the wrapped tranches triple-A and the unwrapped piece BBB-' and Baa3', respectively.

The deal comes a month after Garanti bought back a $200 million MBIA-wrapped transaction and a privately placed $150 deal via Deutsche Bank, both DPR-backed paper placed in 2003, according to a source close to the deal. The reason for this effective refinancing with a new deal was the higher spreads the issuer was paying on the old ones, the source said.

Meanwhile, talk is circulating about two other Turkish banks. Akbank T.A.S. is reportedly readying a $600 million credit card deal via HSBC and ABN. The deal would take out a $270 million transaction led by Citigroup and wrapped by MBIA in June 2004, according to a source active in the sector. The upcoming transaction is understood to have MBIA and XL on board.

Also, Turkiye Vakiflar Bankasi (Vakifbank) is understood to be eying thecapital markets to issue a DPR-backed transaction, according to a sourceclose to the bank. Earlier this year, the bank had an unwrapped $750million DPR deal underwritten by Standard Chartered and West LB. Talk isthat the bank may want to convert the program into a public one designedfor bond investors.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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