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Communiqué on Legal Reserves Amended
Communiqué on Legal Reserves Amended
The Communiqué on Legal Reserves (published in the Official Gazette dated November 16, 2005 and numbered 25995) has been amended by the (i) Amendment Communiqué I (published in the Official Gazette dated July 20, 2012 and numbered 28359), (ii) Amendment Communiqué II (published in the Official Gazette dated August 3, 2012 and numbered 28373), (iii) Amendment Communiqué III (published in the Official Gazette dated August 17, 2012 and numbered 28387) and (iv) Amendment Communiqué IV (published in the Official Gazette dated September 11, 2012 and numbered 28408) (collectively the "Amendment Communiqués") pursuant to which banks may set aside legal reserves for their Turkish Lira liabilities (a) in foreign currency denominated in USD or Euro (and 50% of such legal reserves set aside in foreign currency must be denominated in USD) only up to a maximum limit of 60% of such liabilities provided that (i) first 40% of such amount shall be multiplied with a coefficient of 1.1, (ii) second 5% of such amount shall be multiplied with a coefficient of 1.4, (iii) third 5% of such amount shall be multiplied with a coefficient of 1.7, (iv) fourth 5% of such amount shall be multiplied with a coefficient of 1.9, and (v) fifth 5% of such amount shall be multiplied with a coefficient of 2; and (b) in standard gold and only up to a maximum limit of 30% of such liabilities provided that (i) first 20% of such amount shall be multiplied with a coefficient of 1, (ii) second 5% of such amount shall be multiplied with a coefficient of 1.5, and (iii) third 5% of such amount shall be multiplied with a coefficient of 2.The first amendment via the Communiqué enacted by the Central Bank of the Republic of Turkey (published in the Official Gazette dated May 12, 2012 and numbered 28290) has extended the definition of deductible items prescribed under Article 4. Local banks and headquarters and branches of banks established by international agreements are no longer subject to mandatory reserves.
Furthermore, Turkish Lira equivalents of foreign currency legal reserves are calculated as per the foreign exchange rates announced under the Official Gazette by the Central Bank of the Republic of Turkey on the date of calculation of such legal reserves.
On September 5, 2012, the Undersecreteriat of Treasury announced that it mandated Citigroup, HSBC and Liquidity House (a Kuwait Finance House subsidiary) to explore lease certificate (i.e. sovereign sukuk) issuance opportunities in international capital markets. On September 18, 2012, the lease certificates were priced with a size of USD1.5bn, maturity of 5.5 years (26 March 2018) and lease rate of 2,803% (185bps over the Mid Swap rate). The offering attracted an orderbook of nearly 5 times of the actual issue size from 250 accounts. 58% of the certificates have been sold to investors in Middle East, 13% in Europe, 12% in Asia, 9% in Turkey and 8% in US.
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Pekin & Pekin is a full-service Turkish law firm based in Istanbul. The Firm advises on cross-border transactions in Turkey and the region, and over the 40 years since establishment has gained broad experience in both international and Turkish law. A member of Lex Mundi, TerraLex and SEE Legal, and advisor to ISDA and ICMA, the Firm is committed to excellence and has a culture of participation and success, driving all to exceed client objectives.
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