The board of Türkiye Garanti Bankası yesterday (Thursday) approved the issuance of up to Eu1bn of mortgage covered bonds, which could be the first Turkish issuance backed by mortgages.

The Turkish bank on 5 April said that it would engage in a feasibility study of potential mortgage covered bond issuance, and yesterday announced it will proceed with the project.

The board authorised up to Eu1bn of issuance in one or more series, in Turkish lira or foreign currencies, “to be sold without public offering, inside Turkey, outside Turkey or to qualified investors or by private placement”.

Covered bond issuance from Turkey has so far been confined to SME-backed deals sold as private placements mainly to a small number of supranationals and development banks. Sekerbank has undertaken marketing in relation to a possible internationally targeted public deal and Akbank, which is yet to issue in any format, is also said to be considering its options.