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Turkey’s sovereign wealth fund draws strong demand at debut bond sale

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Turkey’s sovereign wealth fund draws strong demand at debut bond sale

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Turkey’s sovereign wealth fund attracted strong demand for its debut international bond deal, in the clearest sign yet that investors have shrugged off last week’s shake-up at the country’s central bank.

The Turkey Wealth Fund notched up $7bn in orders for its $500mn US dollar-denominated bond deal on Wednesday, according to a term sheet seen by the Financial Times.

The TWF’s successful fundraising underscores how investors have embraced new central bank governor Fatih Karahan, who was appointed on Friday in the latest upheaval for the institution. His predecessor Hafize Gaye Erkan stepped down about eight months into her tenure, during which she increased interest rates from 8.5 per cent to 45 per cent.

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Local and foreign analysts are betting that Karahan, previously the bank’s deputy governor, will stick with Erkan’s policy of using high borrowing costs as the main tool to cool an inflation rate of nearly 65 per cent.

The deal was a sign that Karahan had been “endorsed by the market”, said Stefan Weiler, head of debt capital markets for Central and eastern Europe, the Middle East and Africa at JPMorgan, who worked on the deal.

He said investors had been “reassured” by signs of continuity at the central bank. Allegations had swirled in local media for weeks that Erkan had given her father an unofficial role at the bank and that he had sacked an employee, claims she denies.

The robust demand on the TWF deal helped bankers reduce the yield on the five-year bond from an initial target on Wednesday morning above 9 per cent down to 8.375 per cent by the afternoon.

Turkish sovereign dollar bonds maturing in March 2029 are at present trading with a yield of about 7.6 per cent.

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TWF, which was set up in 2016, holds stakes in a broad array of Turkish companies and infrastructure and real estate assets, including flag carrier Turkish Airlines, several major lenders and the country’s stock exchange Borsa Istanbul. The fund also retains full ownership of energy group Botaş, widely seen as one of Turkey’s crown jewel assets, national postal company PTT and a major port near the western city of Izmir.

TWF declined to comment on its fundraising.

The TWF deal comes as foreign investors, who had largely abandoned Turkey’s local and international assets over the past decade, start to return, encouraged by a broad economic overhaul following President Recep Tayyip Erdoğan’s re-election in May. The central bank’s rate rises, which reversed Erdoğan’s long-held insistence on keeping borrowing costs low at all costs, have been a main pillar of the programme.

Analysts say they broadly expect Karahan will continue with the tighter monetary policy.

The smooth transition at the central bank was “a test passed by Erdoğan . . . because there was a change in governor, but it didn’t mean the policy changed,” Weiler said.

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“Unlike previous leadership changes . . . [Erkan’s] resignation appears not to have been triggered by any disagreement between the political leadership of the country and the central bank,” added Clemens Grafe, economist at Goldman Sachs. That was a reference to previous incidents in which Erdoğan, who previously called high rates the “mother and father of all evil”, sacked governors for raising rates.

Turkish asset prices have broadly reflected economists’ calm reaction to Karahan’s appointment.

Turkey’s lira has fallen slightly against the dollar since Erkan’s resignation, while the benchmark Bist 100 stock index has advanced 2 per cent. The cost of protecting against a Turkish debt default using five-year credit default swaps, a key measure of the perceived risk in holding Turkish assets, has slipped about 10 basis points since last Thursday to 330bp, according to FactSet data.

BBVA, JPMorgan and Standard Chartered were joint global co-ordinators and bookrunners on the TWF deal, while Bank of America, Emirates NBD Capital, ICBC, ING, QNB Capital and Société Générale are bookrunners.

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California’s primary for governor is undecided as candidates vie to be in the top two

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California’s primary for governor is undecided as candidates vie to be in the top two

Xavier Becerra, Democratic gubernatorial candidate for California, and Steve Hilton, Republican gubernatorial candidate for California, shake hands while arriving for a gubernatorial debate at KRON Studios in San Francisco in April.

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SAN FRANCISCO — The primary election for California governor is too close to call, with vote counting continuing Wednesday. Democrat Xavier Becerra and Republican business executive Steve Hilton lead the field with Democrat Tom Steyer in third place.

In California’s unusual primary system, all candidates, regardless of party, appear on a single ballot open to any registered voter. The top two candidates then move on to the general election, even if they’re from the same party. This year, voters had 60 names for governor to choose from.

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The winner will lead the country’s most populous state, where leaders often take on national political prominence. Incumbent Gov. Gavin Newsom is at his two-term limit and could be a Democratic contender for president.

Becerra, former Health and Human Services secretary under President Joe Biden, pitched himself to voters as an experienced political leader who isn’t afraid of President Trump, but his lead caps one of the most surprising and dramatic comebacks in recent state political history. As recently as April, polls were showing Becerra — also a former member of Congress and California attorney general — languishing in single digits in a crowded field.

In his remarks at his watch party in Los Angeles, Becerra noted his underdog status.

“Here in Hollywood’s hometown, we love a good underdog success story,” he said, drawing parallels between his campaign and his immigrant parents’ success story in California. “Guess what? The underdog stayed in the fight. Like my parents, I never gave up. Never stopped putting one foot in front of the other. Never stopped believing in the beacon-like goodness of California. And thankfully, neither did you.”

Hilton is a former Fox News commentator who also served as a political adviser to former British Prime Minister David Cameron. He was endorsed by President Trump in April, helping him to pull ahead of Riverside County Sheriff Chad Bianco, the other major Republican in the race. Hilton has campaigned on the idea that California needs change after 16 years under total Democratic control.

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The race is narrowing down after a tumultuous campaign

At his watch party in Huntington Beach, the British-born candidate — who became an American citizen five years ago — said it was the “honor of his lifetime” to receive over 1 million votes so far.

“Change is coming to California and it’s long overdue,” Hilton said. “We’re not there yet, but it’s looking good. It looks very much as if Californians really will have the chance to vote for change in November and take our state in a new direction.”

Democratic billionaire activist Steyer spent more than $213 million of his own money to boost his candidacy and push a progressive, populist message. While he was trailing Becerra and Hilton on Tuesday night, he said at his watch party in San Francisco that he remains confident he can close the gap in the days ahead.

“Together, we’ve scared the hell out of the corporate interests used to getting their way,” Steyer said. “It might take some time to figure out where this is going. We’re going to wait until every ballot is counted. We’re gonna give democracy a time to work. And we know we finished really strong.”

The early results are not certain to hold, in part because of unusual voting patterns in this primary election: Ballot-tracking data heading into Tuesday evening showed that Republicans were more likely to vote early by mail, while Democratic voters in this deep-blue state held onto their mail-in ballots or chose to vote in person. That’s the reverse of recent elections, which saw more Democrats voting by mail and Republicans tending to vote in person on Election Day.

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The uncertainty on election night capped a race that remained crowded and unsettled to the end. To some extent, the race was defined by who wasn’t running.

Some of the state’s most high-profile Democrats — former Vice President Kamala Harris, U.S. Sen. Alex Padilla and California Attorney General Rob Bonta — all passed on a potential bid to succeed Newsom.

The race was disrupted in April when then-U.S. Rep. Eric Swalwell’s campaign for governor imploded amid allegations of sexual assault and harassment. Swalwell resigned from Congress shortly after the accusations surfaced and has denied assault allegations.

Swalwell had been gaining in polls and racking up high-profile endorsements, and his exit seemed to primarily benefit Becerra, who had been stuck in single digits in many polls. Ultimately, it quieted fears among Democrats who worried that the messy Democratic field could result in Bianco and Hilton winning the top spots in the June primary.

Marisa Lagos covers California politics at KQED and co-hosts the Political Breakdown show and podcast.

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Supreme Court reinstates Republican-favored Alabama congressional districts

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Supreme Court reinstates Republican-favored Alabama congressional districts

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The Supreme Court on Tuesday cleared the way for Alabama to use a congressional district map favored by Republicans.

The court, in an unsigned order, overturned a three-judge district court panel that found that the map is “tainted by intentional race-based discrimination.” The court’s three liberals publicly dissented.

The ruling means that Alabama’s 2026 midterm elections will feature six Republican-leaning districts and one Democratic-leaning one, as opposed to a map with only five safe Republican seats. Democrat Shomari Figures, who represents Alabama’s Second District, will likely lose his seat as a result of the high court’s ruling.

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The story of Alabama’s congressional map is long and tortured. It began in 2021, when the state implemented a new map to account for population changes in the census. The map featured only one majority-black district out of seven, even though the state is more than one-quarter Black.

Voters immediately sued, claiming the map illegally diluted minority votes in violation of the Voting Rights Act and the Constitution. Lower court judges agreed, ruling that the state must draw a map with two districts where Black voters have a realistic chance of electing their candidate of choice. The Supreme Court more than once has ordered Alabama to draw a compliant map.

But the state has refused and instead continued to litigate the case. On Tuesday, that tactic paid off.

What changed? In April, the Supreme Court’s conservative supermajority all but gutted what remains of the Voting Rights Act, ruling that states cannot purposefully draw districts that are majority-minority.

Alabama then asked the high court to reinstate the state’s old map, under the theory that this new ruling meant that it was permissible to use a map with only one majority-Black district. In an unsigned, unexplained order in May, the high court essentially reversed its previous opinions, and allowed Alabama to use the old map for the upcoming midterm elections.

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This set off a flurry of activity in Alabama. By the time the Supreme Court issued its May order, absentee balloting had already begun, using the court-drawn map. So Republican Governor Kay Ivey cancelled elections and scheduled a special primary for August for the affected congressional races.

The case, however, was not over.

In its ruling, the Supreme Court had ordered a lower court panel to continue evaluating Alabama’s map in light of its recent Voting Rights Act decision. And just 15 days after that order, the panel, composed of three Republican judges—two of them Trump appointees—concluded unanimously that even under the Supreme Court’s new standards, the plan for a single black district was “intentionally discriminatory.”

So, once again, Alabama returned to the Supreme Court, arguing that the map was partisan, not racially discriminatory. In short, that the Republican legislature simply drew the map to elect more Republicans. And that under the Supreme Court’s new interpretation of the Voting Rights Act, the GOP map should be allowed to stand.

The court’s conservative agreed, writing that the lower court “did not heed the presumption of legislative good faith.”

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The court’s three liberals publicly dissented, castigating the conservative majority for failing to abide by its 2006 decision in the case of Purcell v. Gonzalez. That decision declared that courts should not change election rules too close to an election.

Justice Sonia Sotomayor, in her dissent, said the court “debases the democratic process” and “corrodes the rule of law by rewarding Alabama’s gamesmanship and outright defiance of court orders.”

Tuesday’s decision is the latest in a series of Supreme Court rulings that could well reshape the 2026 midterm elections, making it much harder for Democrats to prevail.

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Map: 3.7-Magnitude Earthquake Shakes the San Francisco Bay Area

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Map: 3.7-Magnitude Earthquake Shakes the San Francisco Bay Area

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Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

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A minor, 3.7-magnitude earthquake struck in the San Francisco Bay Area on Tuesday, according to the United States Geological Survey.

The temblor happened at 9:44 a.m. Pacific time about 4 miles southeast of Cloverdale, Calif., data from the agency shows.

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U.S.G.S. data earlier reported that the magnitude was 3.6.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

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Aftershocks detected

Subsequent quakes have been reported in the same area. Such temblors are typically aftershocks caused by minor adjustments along the portion of a fault that slipped at the time of the initial earthquake.

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Quakes and aftershocks within 100 miles

Aftershocks can occur days, weeks or even years after the first earthquake. These events can be of equal or larger magnitude to the initial earthquake, and they can continue to affect already damaged locations.

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When quakes and aftershocks occurred

 All times are Pacific time. The New York Times

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Sources: United States Geological Survey (epicenter, aftershocks, shake intensity); LandScan via Oak Ridge National Laboratory (population density) | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Tuesday, June 2 at 12:59 p.m. Eastern. Aftershocks data is as of Tuesday, June 2 at 1:59 p.m. Eastern.

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