Public Debt Instruments

Government Debt Securities (GDS)

Government debt securities are borrowing instruments issued by the Turkish Treasury in the domestic market. The government is indebted, and pays back the holders of Government Debt Securities the borrowed amount on coupon payment days and at the end of maturity. During their maturity term, government debt securities may be traded by real and legal persons in secondary markets.

Government debt securities are classified on the basis of their maturity term, issue method, the currency in which they are denominated, interest payment method, and whether they carry coupons or not.

According to their maturities:

-          Government debt securities with maturity terms of 1 year and more are called “Government Bonds”, and

-          Government debt securities with maturity terms of less than 1 year are called “Treasury Bills”.

Central Bank of the Republic of Türkiye (CBRT) Liquidity Bills

Liquidity bills are used as monetary policy tools issued by the Central Bank of the Republic of Türkiye for managing the market liquidity and contributing to the efficiency of open market trading. Liquidity bills are discounted securities, which are issued by the Central Bank of the Republic of Türkiye on its own name and account with maturities less than 91 days.

Revenue Sharing Certificates

Revenue sharing certificates are those securities entitling their real/legal person holders to the revenues of publicly held infrastructure facilities such as transportation, communication and energy, such as bridges, dams, electricity generators, highways, railroads, telecommunication systems, civil seaports and airports, etc. Revenue sharing certificate holders have no ownership or operation rights on such facilities. Revenue sharing certificates are, by nature, bonds with varying interest.

Revenue Indexed Bonds

Turkish Treasury realized its first issue of revenue indexed bonds on January 28, 2009 in order to encourage domestic saving, diversify Government Debt Securities and widen the investor base. The yield of these instruments are indexed to the revenues of the state owned enterprises including Turkish Petroleum Corporation (Türkiye Petrolleri Anonim Ortaklığı-TPAO), State Procurement Office (Devlet Malzeme Ofisi -DMO), General Directorate of State Airports Authority (Devlet Hava Meydanları İşletmeleri-DHMİ) and General Directorate of Coast Safety (Kıyı Emniyeti Genel Müdürlüğü- KIYEM), which are transferred to the state’s budget. The yields of the revenue indexed bonds are related to the state’s income and coupon payments are guaranteed within a minimum and maximum range.

Private Sector Debt Instruments

Private Sector Bonds

Bonds are debt securities issued by the government or joint stock corporations for borrowing purposes. The maturity terms of private sector bonds can be one year or more and may be issued with fixed or variable interest rates. Private sector bonds are mostly sold through a consortium consisting of more than one intermediary institution.

The bond holder is a long term creditor of the issuing company. The only right that the bond holder has over the company is merely his credit, and has no right to participate in the company management. The legal relationship between the bond holder and the company ends at the end of maturity. Bond holder is not exposed to the profit/loss risk of the bond issuing company and shall receive his principal and interest, regardless the company makes profits or not.

The most important factors that influence the proceeds of bonds are their liquidity and risk. Since company bonds carry higher risk compared to government bonds in consideration of bankruptcy and default in repayment of interest and capital, they mostly offer higher interest. In the case of bankruptcy or liquidation of companies, company debt is repaid first, and therefore, bond holders will have priority of payment over the company shareholders.

With the exception of public debt securities, bond issues are subject to the arrangements of the Capital Markets Board of Türkiye. Private sector bonds may be offered to the public or sold without being offered to the public.

Commercial Papers

Commercial papers are discounted short-term borrowing instruments, which are subject to the arrangements of the Capital Markets Board of Türkiye. The maturity term of commercial papers may not be longer than one year. Commercial papers are discounted on the basis of their maturity term.

Asset-backed Securities

Asset backed securities are debt instruments issued by institutions authorized to establish asset financing funds, collateralized by the assets in the financed portfolio. Asset backed securities may be traded on exchanges.

Institutions authorized to establish asset financing funds are banks, leasing and financing companies, mortgage companies and brokerage houses. Asset backed securities may be issued by asset financing funds only. Asset backed securities may be sold to qualified investors with allocation method or by public offering.

An asset financing fund is an asset with no legal personality, created by asset backed security holders on account basis, and may be established for a definite or indefinite period.

Consumer loans (excluding mortgage housing loans) and mortgage loans, loans for motor vehicles, project finance and corporate loans, receivables from leasing contracts, and receivables of the Housing Development Administration of Türkiye from real estate sales may be transferred to the portfolios of asset financing funds and asset backed securities may be issued under the collateral of such receivables.

Asset-based Securities

Asset-based securities are issued by banks, financing companies and companies authorized to carry out financial leasing, real estate investment trusts, and public institutions authorized to issue securities, and which are collateralized by the assets in their balance-sheets.  

Asset-based securities are under the general liability of the issuers. Assets and receivables that may be subject to asset-based securities issuance are consumer loans, commercial loans, receivables from financial and operational leasing agreements, receivables from export transactions, receivables from banks’ specialized loans given to craftsmen and artisans and small enterprises, notes receivables originating from real estate investment companies from the sales of real estate or agreements representing a promise to sell property, receivables originating from the sales of real estate of the Housing Development Administration of Türkiye, substitute assets, notes receivables originating from installment sales of goods and service producing joint stock companies other than banks and state owned enterprises including those to be privatized according to the related regulation, and other assets whose features will be determined by the Capital Markets Board of Türkiye. Collateral assets must be available for written and/or electronic monitoring in order to allow discriminating from the issuer’s other assets.

These assets shall not be used for any other purposes, shall not be pledged, shall not be used as collateral, shall not be subject to injunction decisions of courts, and shall not be included in the bankruptcy process, even for the purpose of collecting public claims until the asset-based securities are redeemed.

Asset-based securities may be offered to the public or sold to qualified investors without being offered to the public.

Lease Certificates

A lease certificate is a security issued by an asset leasing company in order to finance the assets that are acquired or leased, and which entitles its holders to the revenues attained from such assets in proportion to their shares.

Regulations concerning the issuance of lease certificates have been completed by the Capital Markets Board of Türkiye and they are introduced to the capital markets as alternative instruments to allow companies to raise funds from the capital markets.

Asset lease companies are joint stock corporations incorporated by brokerage houses, banks and originators, exclusively in order to issue lease certificates. Asset lease companies are incorporated by the originators with the purpose of generating lease income by subletting to the originators the assets assigned to them by the originators, issuing lease certificates backed by the returns from such lease, and assigning the asset in question back to the originator at the end of the lease term.

Since lease certificates are backed by assets which may be sold and liquidated, they are of a more conservative nature, and therefore offer a more secure alternative for investors.

The system basically depends on the originator company to raise funds by subletting the assets it assigned to the asset lease company. At the first phase, asset lease companies finance these assets through the lease certificates it issues, and use the periodical lease revenues from the originator for the periodical payments of the lease certificates. At the end of the lease term, the revenues from the assets transferred back to the originator are distributed to the lease certificate holders pro rata their shares, thereby redeeming the issued lease certificates.

Lease certificates may be offered to the public, sold by allocation method, or may be issued to qualified investors only.


Repo/reverse repo transactions carried out by institutions that demand funds and who have funds through the buy/sell commitment and sale/purchase of financial instruments.

Repo includes the sale of a security with the promise of repurchase at the start value date and the repurchase of the security at the end value date; reverse repo includes the purchase of a security with the promise of reselling at the start value date and the sale of the security at the end value date.

There are different repo/reverse repo markets Debt Securities Market, where different securities are traded.

Related Pages

Repo- Reverse Repo Market Repo Market for Specified Securities Equity Repo Market


Eurobonds are debt instruments issued in a country currency other than the currency of the country issued. In order to diversify the financing tools offered to investors and to expand the investor base, US Dollar and Euro denominated Government Domestic Debt Instruments (Eurobonds) are issued by the Ministry of Treasury and Finance.

Related Pages

International Bonds Market