Halkbank has announced its intention to issue covered bonds internationally, with the state-owned Turkish bank setting out plans for up to $1.5bn equivalent of issuance.

In a press release published on Wednesday, Halk Bankası (Halkbank) said its board of directors “has resolved to authorize the head office to issue mortgage-covered and/or asset-covered securities”.

It said its issuance will have a maximum size of $1.5bn (Eu1.29bn, TL5.32bn) or equivalent in other currencies, and could have fixed and/or floating rate coupons and different maturities of up to 10 years.

The only euro benchmark Turkish covered bond to date was a Eu500m five year mortgage-backed issue in April 2016 from VakıfBank, which is also state-owned.

Compatriots such as Garanti Bank, Yapı Kredi and İşbank have established mortgage covered bond programmes, but are yet to issue benchmarks.

Turkish covered bond issuance was in the first instance SME-backed, mainly through private placements with foreign and supranational development banks.