Obligation Turkiye 11% ( US900123AR10 ) en USD

Turkiye

100 % ⇌

Turquie

US900123AR10 ( en USD )

11% par an ( paiement semestriel )

14/01/2013 - Obligation échue

Prospectus brochure de l'obligation Turkey US900123AR10 en USD 11%, échue

100 000 USD

1 500 000 000 USD

900123AR1

La Turquie est un pays transcontinental situé à la fois en Europe et en Asie, possédant un riche héritage culturel et historique qui englobe des influences byzantines, ottomanes et anatoliennes.

L'obligation turque (ISIN : US900123AR10, CUSIP : 900123AR1) d'un montant total de 1 500 000 000 USD, émise à un taux d'intérêt de 11%, avec une taille minimale d'achat de 100 000 USD et une fréquence de paiement semestrielle, est arrivée à échéance le 14/01/2013 et a été intégralement remboursée à son prix nominal de 100%.

<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>y82426b5e424b5.txt
<DESCRIPTION>REPUBLIC OF TURKEY: PROSPECTUS SUPPLEMENT
<TEXT>
<PAGE>
As Filed Pursuant to Rule 424(b)(5)
Registration No. 333-12954
PROSPECTUS SUPPLEMENT
(to Prospectus dated December 7, 2000)
$750,000,000
[TURKEY'S FLAG]
TURKIYE CUMHURIYETI
(The Republic of Turkey)
11.0% NOTES DUE 2013
The Republic of Turkey is offering $750,000,000 principal amount of its
11.0% Notes due January 14, 2013. The notes will constitute direct, general and
unconditional obligations of the Republic. The full faith and credit of the
Republic will be pledged for the due and punctual payment of all principal and
interest on the notes. The Republic will pay interest on July 14 and January 14
of each year, beginning on July 14, 2003.
We have applied to list the notes on the Luxembourg Stock Exchange in
accordance with its rules.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE NOTES OR DETERMINED THAT THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PER NOTE TOTAL
<S> <C> <C>
Public Offering Price 98.522% $738,915,000
Underwriting Discount 0.400% $ 3,000,000
Proceeds to the Republic of Turkey (before expenses) 98.122% $735,915,000
</TABLE>
--------------------------
The underwriters are offering the notes subject to various conditions.
The underwriters expect delivery of the notes on or about January 14, 2003,
through the book-entry facilities of The Depository Trust Company.
Joint Book Running Managers
<TABLE>
<S> <C>
JPMORGAN MORGAN STANLEY
Co-Lead Managers
DEUTSCHE BANK SECURITIES SALOMON SMITH BARNEY
Co-Managers
</TABLE>
<TABLE>
<S> <C>
ABN AMRO ALPHA BANK
COMMERZBANK SECURITIES CREDIT SUISSE FIRST BOSTON
DRESDNER KLEINWORT WASSERSTEIN GOLDMAN SACHS INTERNATIONAL
HSBC LEHMAN BROTHERS
MERRILL LYNCH & CO. UBS WARBURG
</TABLE>
January 9, 2003
<PAGE>
The Republic has made all reasonable inquiries and confirms that this
prospectus supplement and the accompanying prospectus dated December 7, 2000,
including the documents incorporated by reference, contain all information with
respect to the Republic and the notes that is material in the context of the
issue and offering of the notes, and that this information is true and accurate
in all material respects and is not misleading, that the opinions and intentions
expressed herein and therein are honestly held and that, to the best of the
Republic's knowledge and belief, there are no other facts the omission of which
would make any of this information or the expression of these opinions and
intentions misleading. The Republic accepts responsibility accordingly.
You should rely only on the information contained in this prospectus
supplement and the accompanying prospectus, including the documents incorporated
by reference, in making your investment decision. We have not authorized anyone
to provide you with any other information. If you receive any unauthorized
information, you must not rely on it.
We are offering to sell the notes only in places where offers and sales
are permitted.
You should not assume that the information contained in this prospectus
supplement or the accompanying prospectus is accurate as of any date other than
its respective date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
PROSPECTUS SUPPLEMENT PROSPECTUS

Offering Summary.......................... S-3 Where You Can Find More Information...... 2
Recent Developments....................... S-5 Use of Proceeds.......................... 2
Description of the Notes.................. S-11 Debt Securities.......................... 3
Global Clearance and Settlement........... S-14 Plan of Distribution..................... 12
Taxation.................................. S-18 Validity of the Securities............... 14
Underwriting.............................. S-21 Official Statements...................... 14
Legal Matters............................. S-23 Authorized Agent......................... 14
</TABLE>
We are a foreign sovereign state. Consequently, it may be difficult for
investors to obtain or realize upon judgments of courts in the United States
against us. See "Debt Securities -- Governing Law and Consent to Service" in the
accompanying prospectus.
References to "TL" in this prospectus supplement are to the Turkish
Lira, the Republic's official currency. References to "U.S.$," "$," "U.S.
dollars" and "dollars" in this prospectus supplement are to lawful money of the
United States of America.
S-2
<PAGE>
OFFERING SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information appearing elsewhere in this prospectus supplement and
the accompanying prospectus.
<TABLE>
<S> <C>
ISSUER.................................... The Republic of Turkey.
SECURITIES OFFERED........................ $750,000,000 principal amount of 11.0% Notes due January 14, 2013.
MATURITY DATE............................. January 14, 2013.
ISSUE PRICE............................... 98.522% of the principal amount of the notes.
INTEREST PAYMENT DATES.................... July 14 and January 14 of each year, commencing July 14, 2003.
STATUS AND RANKING........................ Upon issuance, the notes will be our direct unconditional and
general obligations and will rank equally with our other external
debt denominated in currencies other than Turkish Lira which is
(i) payable to a person or entity not resident in Turkey and (ii)
not owing to a Turkish citizen. See "Debt Securities -- Status of
the Debt Securities" and "Debt Securities -- Negative Pledge" in
the accompanying prospectus.
MARKETS................................... The notes are offered for sale in those jurisdictions where it is
legal to make such offers. See "Underwriting."
LISTING................................... We have applied to list the notes on the Luxembourg Stock Exchange
in accordance with its rules.
NEGATIVE PLEDGE........................... Clause (9) of the definition of Permitted Lien set forth on pages
five and six of the accompanying prospectus shall read as follows
for purposes of the notes: Liens on any assets (other than
official holdings of gold) in existence on January 14, 2003,
provided that such Liens remain confined to the assets affected
thereby on January 14, 2003 and secure only those obligations so
secured on January 14, 2003.
FORM...................................... The notes will be book-entry securities in fully registered form,
without coupons, registered in the names of investors or their
nominees in denominations of $1,000 and integral multiples of
$1,000 in excess thereof.
CLEARANCE AND SETTLEMENT.................. Beneficial interests in the notes will be shown on, and transfer
thereof will be effected only through, records maintained by The
Depository Trust Company ("DTC") and its participants, unless
certain contingencies occur, in which case the notes will be
issued in definitive form. Investors may elect to hold interests
in the notes through DTC, Euroclear Bank S.A./N.V. ("Euroclear")
or Clearstream Banking Luxembourg, societe anonyme ("Clearstream
Banking Luxembourg"), if they are participants in such systems, or
indirectly through organizations that are participants in such
systems. See "Global Clearance and Settlement."
PAYMENT OF PRINCIPAL AND INTEREST......... Principal and interest on the notes will be payable in U.S.
dollars or other legal tender of the United States of America. As
long as the notes are in the form of a book-entry security,
payments of
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
principal and interest to investors shall be made
through the facilities of DTC. See "Description of the Notes --
Payments of Principal and Interest" and "Global Clearance and
Settlement -- Ownership of Notes through DTC, Euroclear and
Clearstream Banking Luxembourg."
DEFAULT................................... The notes will contain events of default, the occurrence of which
may result in the acceleration of our obligations under the notes
prior to maturity. See "Debt Securities -- Default; Acceleration
of Maturity" in the accompanying prospectus.
SINKING FUND.............................. None.
PRESCRIPTION PERIOD....................... None.
USE OF PROCEEDS........................... We will use the net proceeds of the sale of the notes for general
financing purposes, which may include the repayment of debt. The
amount of net proceeds (before expenses) is $735,915,000.

FISCAL AGENT.............................. The notes will be issued pursuant to a fiscal agency agreement,
dated as of December 15, 1998, between us and JPMorgan Chase Bank,
as fiscal agent, paying agent, transfer agent and registrar.
TAXATION.................................. For a discussion of United States and Turkish tax consequences
associated with the notes, see "Taxation" in this prospectus
supplement. Investors should consult their own tax advisors in
determining the foreign, U.S. federal, state, local and any other
tax consequences to them of the purchase, ownership and
disposition of the notes.
GOVERNING LAW............................. The notes will be governed by the laws of the State of New York,
except with respect to the authorization and execution of the
notes, which will be governed by the laws of the Republic of
Turkey.
</TABLE>
S-4
<PAGE>
RECENT DEVELOPMENTS
POLITICAL CONDITIONS
General elections for the Grand National Assembly (the "Assembly") were
held on November 3, 2002. The Justice and Development Party (AKP) received 34.3%
of the votes and was able to secure 363 out of 550 available seats in the
Assembly. As a result of the elections, the Justice and Development Party (AKP)
now has a simple majority in the Assembly. The Republican People's Party (CHP)
is the only other political party in the new Assembly, having received 19.4% of
the votes and 178 seats in the Assembly. Independent candidates (unaffiliated
with political parties) gained 9 seats in the Assembly.
The following table sets forth the official results of the November 3,
2002 elections by percent of total votes and seats won:
<TABLE>
<CAPTION>
POLITICAL PARTY PERCENTAGE OF VOTE NUMBER OF SEATS
--------------- ------------------ ---------------
<S> <C> <C>
Justice and Development Party (AKP) 34.3% 363
Republican People's Party (CHP) 19.4% 178
Independent Candidates (no party affiliation) 1.0% 9
True Path Party (DYP)(1) 9.6% 0
Nationalist Action Party (MHP)(1) 8.4% 0
Young Party (GP)(1) 7.3% 0
Democratic People's Party(1) 6.2% 0
Others(2) 14.0% 0
</TABLE>
--------
(1) Failed to obtain the requisite 10% of total votes; no seats in the Assembly.
(2) Includes all other political parties that failed to obtain the requisite 10%
of total votes.
The official results of the election were published in the Official
Gazette on November 10, 2002. President Ahmet Necdet Sezer appointed Mr.
Abdullah Gul from the Justice and Development Party (AKP) as the new Prime
Minister on November 16, 2002. Prime Minister Gul's cabinet was approved by
President Sezer on November 18, 2002. The number of ministries comprising the
cabinet was reduced from 36 to 24. Mr. Ali Babacan was appointed as the Minister
in charge of the Undersecretariat of Treasury. Mr. Abdullatif Sener was
appointed as the Deputy Prime Minister in charge of the Privatization
Administration and the State Planning Organization. Mr. Kemal Unakitan was
appointed as the Finance Minister. The list of the new council of ministers was
published in the Official Gazette on November 19, 2002 and the new Government's
program was approved by the Assembly on November 28, 2002.
Prior to the general elections on November 3, 2002, Turkey was
challenged by a weakened government and political uncertainty about its future.
Prime Minister Bulent Ecevit, the leader of the three-party coalition
government, was hospitalized twice in May. The then existing three-party
coalition government consisted of the Democratic Leftist Party, the Motherland
Party and the Nationalist Action Party. In July 2002, Mr. Ecevit's refusal to
step down as Prime Minister resulted in the resignation of half of the members
of the Democratic Leftist Party in the Assembly. As a result of the
resignations, the three-party coalition lost its absolute majority, with the
number of seats it held in the Assembly falling to 270 out of 550.
After repeated refusals to hold elections before their scheduled date,
Mr. Ecevit announced that general elections would be held in November,
approximately 17 months before the scheduled general elections, pending approval
by the Assembly. On July 31, 2002, the Assembly voted to hold elections on
November 3, 2002.
In July 2002, the New Turkey Party was formed by foreign minister
Ismail Cem and deputy prime minister Husamettin Ozkan, both of whom resigned
from the Democratic Leftist Party, as well as certain other former deputies of
the Democratic Leftist Party. Economic minister Kemal Dervis resigned from his
position on August 10, 2002, and, following his resignation, joined the
Republican People's Party.
S-5
<PAGE>
In December 2002, parliamentary elections in the province of Siirt were
invalidated due to alleged election irregularities. The High Electoral Board has
since set a new election date of February 9, 2003 and Mr. Recep Tayyip Erdogan,
the leader of the AKP, is expected to announce his intention to run for the
Siirt parliamentary post. If the High Electoral Board permits his application
for candidacy, it is anticipated that Mr. Erdogan, who was barred from running
in the November 2002 elections, may now participate in the Siirt elections as a
result of a recent consitutional amendment.
GENERAL
On February 4, 2002, the International Monetary Fund (the "IMF") Board
approved a new stand-by arrangement for 2002-2004 (the "2002-2004 Stand-By

Arrangement") that consists of additional international lending of up to SDR(1)
12.8 billion consisting of approximately SDR 9.5 billion in new international
lending and approximately SDR 3.3 billion available under the old stand-by
arrangement. Of this amount, Turkey had expected to receive SDR 11.2 billion
from the IMF in 2002. Following the approval of the 2002-2004 Stand-By
Arrangement, Turkey drew SDR 7.3 billion of the SDR 11.2 billion available for
2002.
On April 15, 2002, Turkey drew its first tranche of the remaining SDR
3.9 billion available from the IMF in 2002, amounting to SDR 867.6 million,
following the completion of the first review of the Turkish economy under the
2002-2004 Stand-By Arrangement and IMF Board approval. On June 28, 2002, Turkey
drew its second tranche of SDR 867.6 million following completion of the second
review and IMF Board approval, and on August 7, 2002, Turkey drew its most
recent tranche of SDR 867.6 million, following the completion of the third
review and IMF Board approval. The IMF and the Government have agreed to the
conditions that will have to be satisfied before the remaining tranche of
approximately SDR 1.3 billion available from the IMF for 2002 under the
2002-2004 Stand-By Arrangement can be released. An IMF team visited Turkey in
October 2002 and December 2002 to discuss the terms of the fourth review under
the 2002-2004 Stand-By Arrangement. The fourth review is expected to begin in
the second half of January 2003. The remaining tranche of approximately SDR 1.3
billion (as of the date of this prospectus supplement, approximately $1.71
billion) is expected to be released following completion of the fourth review
and IMF Board approval.
In addition, Turkey had expected to receive in 2002 approximately $2.9
billion from the International Bank for Reconstruction and Development (the
"IBRD") in connection with its structural reforms of the financial, economic,
social and agricultural sectors. The release of such funding was linked to
Turkey's continued efforts to liberalize such sectors and to curtail public
expenditures. Only $650 million of the IBRD assistance was released because
implementation of the planned structural reforms was delayed as a result of the
decision, made in July 2002, to hold early elections in November 2002. The
undisbursed amounts under the IBRD structural reform assistance facility remain
available to Turkey subject to the continued implementation of structural
reforms. On April 16, 2002, the World Bank approved a $1.35 billion public and
financial sector special adjustment loan for Turkey. The loan is to be disbursed
in three tranches of approximately $450 million each, based on the satisfaction
of certain agreed upon actions. On August 16, 2002, Turkey drew its first
tranche of $450 million. In addition, the first tranches of the program
financing part of the Agriculture Reform Implementation Project Loan (ARIP) and
the adjustment part of the Social Risk Mitigation Loan, amounting to $100
million each, were released in 2002. On July 26, 2002, Turkey and the World Bank
signed a $300 million loan agreement to support the Government's basic education
program over the next four years. The new government and the World Bank are
expected to start negotiations regarding the new Country Assistance Strategy
(CAS) to define a strategic framework for the World Bank's support to Turkey.
On November 7, 2002, Standard and Poor's B- rating outlook for Turkey
was revised from negative to stable. Moody's B1 rating of a negative outlook for
Turkey, which was announced on July 10, 2002, has remained unchanged.
-----
(1) The Special Drawing Right (SDR) serves as the unit of account of the IMF.
The value of the SDR in terms of U.S. dollars was SDR 1 = $1.35957 on January 9,
2003.
S-6
<PAGE>
The Tobacco Law and the Public Procurement Law were approved by the
Assembly on January 3, 2002 and January 4, 2002, respectively. The Tobacco Law
is intended to foster competition in the tobacco market and includes new
arrangements for the privatization of Tekel, the state-owned alcohol and tobacco
monopoly. The Public Procurement Law, which came into effect on January 1, 2003,
is intended to regulate the tender process for public contracts and strengthen
the transparency and efficiency of such tenders. On March 28, 2002, the Assembly
approved the Law Regarding the Regulation of Public Finance and Debt Management
(Law No. 4749). The Law Regarding the Regulation of Public Finance and Debt
Management establishes, among other things, the rules for, and limitations on,
public sector domestic and foreign borrowing and the issuance of debt guarantees
by the Government.
In January 2002, the Assembly also passed Law No. 4743, which amends
certain provisions of the Banking Law to enable the Government to offer limited
financial assistance, on a one-time basis, to strengthen the capital base of
banks that meet certain capital adequacy ratios. A three-phase audit process, by
which the targets for, and the amounts of, this limited financial assistance,
was completed in June 2002. Based on the audit, the Banking Regulation and
Supervision Agency (the "BRSA") approved the takeover of one bank (Pamukbank
T.A.S.) by the Savings Deposit Insurance Fund (the "SDIF"). The BRSA informed 26
other banks of the capital shortfalls for such banks (TL1,326 trillion) which
will have to be raised by such banks. As of September 13, 2002, the banks had
raised a total of TL1,102 trillion of the total TL1,326 trillion capital
shortfall. The remaining financial assistance to be made available by the
Government will be within the financial targets set by the Government and is not
expected to have a material impact on the Government's budget.
KEY ECONOMIC INDICATORS
- Real gross national product ("GNP") declined 9.4% in 2001, compared to the
original forecasted decline of 5.5%. In the first, second and third
quarters of 2002, GNP grew by 0.2%, 9.4% and 7.8%, respectively.
- For the year ended December 31, 2001, real gross domestic product ("GDP")
declined by 7.4%. In the first, second and third quarters of 2002, GDP rose
by 1.8%, 8.8% and 7.9%, respectively.
- From January to December 2002, the wholesale price index ("WPI") increased
by 30.8% and the consumer price index ("CPI") increased by 29.7%. The
Government's targets for WPI and CPI for 2002 were 35% and 31%,
respectively.
- In December 2002, the annual inflation rate for WPI and CPI were 30.8% and
29.7%, respectively.
- In December 2002, WPI increased by 2.6% and CPI increased by 1.6%.

- On January 8, 2003, the Central Bank foreign exchange buying rate for U.S.
dollars was TL1,669,700 per U.S. dollar, compared to an exchange buying
rate of TL1,390,232 per U.S. dollar on January 8, 2002.
- On January 7, 2003, the Government offered an interest rate of 57.1% for
five-month Treasury bills and 59.6% for nine-month Treasury bills, compared
to an interest rate of 50.7% for five-month Treasury bills on December 10,
2002 and 56.5% for eight-month Treasury bills on November 5, 2002.
- The industrial production index grew 8.6% in November 2002 compared to
November 2001.
- The unemployment rate, which was 8.0% in the third quarter of 2001, 10.6%
in the fourth quarter of 2001, 11.8% in the first quarter of 2002 and 9.6%
in the second quarter of 2002, increased to 9.9% in the third quarter of
2002.
- In the third quarter of 2002, official unemployment was 2,373,000, compared
to 2,217,000 in the second quarter of 2002.
S-7
<PAGE>
- A Council of Ministers' Decree providing for the increase in salaries of
public civil servants was enacted and put into force on January 8, 2003.
The rates of increase vary incrementally, from 6.5% to 13.7%, according to
the employee's position.
TOURISM
- From January to October 2002, tourism revenues increased to approximately
$7,788 million from approximately $7,482 million during the same period in
2001.
- From January to October 2002, the number of foreign visitors to Turkey
increased by approximately 12.4% to approximately 12,027,916 from
approximately 10,700,996 during the same period in 2001.
- In October 2002, the number of foreign visitors to Turkey increased by
33.3%, compared to the same month of the previous year.
FOREIGN TRADE AND BALANCE OF PAYMENTS
Between January and October 2002, the trade deficit amounted to
approximately $5.6 billion, as compared to approximately $3.92 billion in the
same period in 2001. The current account balance produced a surplus of
approximately $594 million between January and October 2002, as compared to a
surplus of approximately $3.4 billion in the same period in 2001.
As of December 20, 2002, total gross international reserves were
approximately $38.5 billion (compared to $33.1 billion as of December 28, 2001),
Central Bank reserves were approximately $25.9 billion (compared to $18.7
billion as of December 28, 2001), commercial bank reserves and special finance
house reserves were approximately $11.5 billion (compared to $13.4 billion as of
December 28, 2001) and gold reserves were approximately $1.0 billion (compared
to $1.0 billion as of December 28, 2001). As of January 3, 2003, Central Bank
reserves were approximately $ 27.0 billion.
PUBLIC FINANCE AND BUDGET
- For the year ended December 31, 2001, consolidated budget expenditures were
approximately TL79,856 trillion and consolidated budget revenues were
approximately TL51,090 trillion, compared to approximately TL46,193
trillion and TL33,189 trillion during the same period in 2000,
respectively.
- From January to October 2002, consolidated budget expenditures were
approximately TL87,920 trillion and consolidated budget revenues were
approximately TL58,843 trillion, compared to approximately TL64,957
trillion and TL40,601 trillion during the same period in 2001,
respectively.
- From January to October 2002, the consolidated budget deficit was
approximately TL29,077 trillion, compared to TL24,355 trillion during the
same period in 2001.
- From January to October 2002, the primary surplus reached approximately
TL13,503 trillion, compared to TL11,736 trillion during the same period in
2001.
- For the year ended December 31, 2001, the primary surplus amounted to
TL12,299 trillion, or 6.9% of GNP. The primary surplus was targeted to be
6.5% of GNP in 2002.
- A draft budget for 2003 has been submitted to the Assembly. An interim
budget for the first 3 months of 2003 was enacted on December 27, 2002.
PRIVATIZATION
S-8
<PAGE>
The second public offering of shares in Petrol Ofisi (a petroleum
distribution company) was completed in March 2002. In that public offering,
16.5% of the shares of Petrol Ofisi were sold for $168 million. The remaining
25.8% stake in Petrol Ofisi was privatized through a block sale of stock to IS
Dogan Petrol Yatirimlari A.S. in July 2002.
The Government originally planned to close the third public offering of
TUPRAS (a petroleum refining company) by the end of June 2002. However, the
offering has been postponed as a result of unfavorable market conditions.
The planned privatization of Turkiye Vakiflar Bankasi T.A.O. has also
been postponed because none of the potential bidders could satisfy the condition
that the bank be purchased as a whole.
A privatization plan for TEKEL's tobacco and alcohol entities was
submitted to the Privatization High Council and approved by such Council in
December 2002. A privatization plan for SEKER (a sugar company) has been
submitted to the Privatization High Council and is still under evaluation.

The advisor for the revaluation of Turk Telecom was selected in August
2002 and the privatization plan is expected to be submitted to the Council of
Ministers in March 2003.
BANKING SYSTEM
On July 1, 2001, the BRSA cancelled the banking license of Turk Ticaret
Bankasi A.S. (Turk Ticaret Bank). In December 2001, the banking licenses of
three banks previously taken over by the SDIF, Iktisat Bankasi T.A.S., Etibank
A.S. and Kentbank A.S., were also revoked. On January 11, 2002, the SDIF sold
all of its shares in Sitebank A.S. to NovaBank S.A. (Greece). On June 19, 2002,
Pamukbank T.A.S. (Pamukbank) was taken over by the SDIF. The banking license of
Toprakbank A.S. (Toprakbank) was revoked by the BRSA on September 26, 2002 and,
following the revocation, Toprakbank was merged with Bayindirbank. The BRSA
accepted Denizbank A.S. (Denizbank)'s bid regarding the purchase of Milli Aydin
Bankasi T.A.S. (Tarisbank) as of October 10, 2002. The share transfer agreement
regarding the purchase of Tarisbank by Denizbank A.S. was signed on October 21,
2002 and the share transfer was finalized as of October 25, 2002. As of November
1, 2002, the SDIF had taken over 20 private banks since 1997. On November 22,
2002, the Council of State suspended the BRSA's resolution regarding the
takeover of Pamukbank by the SDIF. A final decision of the Council of State is
expected on the status of Turk Ticaret Bank and Pamukbank.
The full merger of the operations of Tarysbank and Denizbank was
completed in December 2002. Bayyndyrbank will remain under the control of SDIF
and is to be used as a "Bridge Bank" by SDIF.
On June 21, 2002, the BRSA issued the final regulation on the new
accounting standards to ensure that the year-end balance sheets of all banks
comply with International Accounting Standards for 2002.
DEBT
Turkey's total internal debt was approximately TL145,295 trillion as of
November 2002, compared to TL117,244 trillion as of November 2001. During the
period from January to December 2002, the average maturity of Turkish internal
public debt was 8.5 months, compared to 4.8 months in the same period of 2001.
The average annual interest rate on internal public debt on a compounded basis
was 64.2% as of December 2002, compared to 99.0% as of December 2001. Turkey's
external debt was approximately $127,477 billion in the third quarter of 2002,
compared to $115,186 billion as of the end of 2001. Since December 31, 2001,
Turkey has issued the following external debt:
- $600 million of global notes on January 22, 2002, with a maturity of ten
years and an 11-1/2% interest rate, which was increased to $1 billion on
December 9, 2002.
- $250 million of global notes on February 19, 2002, with a maturity of five
years and an 113/8% interest rate.
S-9
<PAGE>
- $600 million of global notes on March 19, 2002, with a maturity of six
years and a 9.875% interest rate.
- Euro 750 million of Eurobonds on May 7, 2002, with a maturity of five years
and a 9.75% interest rate.
- $500 million of global notes on November 13, 2002, with a maturity of five
years and two months and a 10.50% interest rate, which was increased to
$750 million on November 26, 2002.
INTERNATIONAL RELATIONS
EC Regulation 2500/2001, which governs pre-accession financial
assistance to Turkey, became effective as of January 1, 2002. Although Turkey is
not able to benefit from structural funds like other candidate countries, Turkey
received Euro 126 million in 2002 from the European Union (the "EU"). Turkey
expects to receive another Euro 149 million from the EU in 2003.
On August 2, 2002, the Assembly approved legislation drafted to
harmonize Turkey's laws with those of the EU. The legislation abolishes the
death penalty except in war or near-war conditions, grants the right to conduct
broadcasting and education in languages other than Turkish and increases the
rights of religious minorities. The legislation seeks to satisfy several
conditions required before accession talks between the EU and Turkey may begin.
The EU, in its regular report published in October 2002, indicated that
Turkey had made progress towards complying with the political criteria
established for accession to the EU and particularly highlighted the recent
amendments to the Turkish Constitution.
At a meeting of the Copenhagen European Council on December 12-13,
2002, that Council decided that if the European Council comes to the conclusion
in December 2004 that, on the basis of a report and a recommendation from the
European Commission, Turkey fulfils the Copenhagen political criteria, the EU
will open accession negotiations without delay.
In accordance with the Commission's recommendations in its 2002
Strategy Paper, it was also decided in Copenhagen that in order to assist Turkey
towards EU membership, the following steps would be taken: (1) the scope of
Turkey's participation in the Customs Union would be extended; (2) the EU would
intensify its scrutiny of Turkish legislative efforts to implement EU admission
criteria; and (3) the EU would significantly increase its pre-accession
financial assistance to Turkey.
Turkey is currently commanding the peacekeeping force in Afghanistan
and remains important in possible U.S. military actions against Iraq. Although a
strong U.S. ally, Turkey has expressed certain reservations regarding military
action against Iraq. In the event military action against Iraq is undertaken,
Turkey is expected to experience certain negative economic effects, such as
decreases in revenues from trade and tourism, increases in oil expenditures,
decreases in capital inflow, increases in interest rates and increases in
military expenditures.
On June 20, 2002, Sen. John B. Breaux (D-La.) introduced legislation
that would provide duty-free access to the U.S. market for products produced in

designated "industrial zones" in Turkey. The legislation, called the
Turkish-Israeli Economic Enhancement Act, would allow Turkey to participate in
the Qualifying Industrial Zone program established in 1996 to facilitate
economic cooperation between Israel, Egypt and Jordan. The proposed bill would
cover certain Turkish-made products but would not include textiles.
On November 11, 2002, the United Nations released a new peace plan for
Cyprus, which contemplates a unified island.
S-10
<PAGE>
DESCRIPTION OF THE NOTES
The notes will be issued pursuant to and will be subject to the fiscal
agency agreement dated December 15, 1998 between the Republic and JPMorgan Chase
Bank as fiscal agent. The Republic has appointed a registrar, paying agent and
transfer agent in accordance with the fiscal agency agreement.
The following description and the description in the accompanying
prospectus contain a summary of the material provisions of the notes and the
fiscal agency agreement. The Republic has filed a copy of the fiscal agency
agreement and the form of notes with the SEC and at the office of the fiscal
agent in New York City.
GENERAL TERMS OF THE NOTES
The notes:
- will be issued in an aggregate principal amount of $750,000,000.
- will mature at par on January 14, 2013.
- will bear interest at 11.0% from January 14, 2003.
- will pay interest semi-annually in arrears in equal installments on
July 14 and January 14 of each year, commencing on July 14, 2003, to be
paid to the person in whose name the note is registered at the close of
business on the preceding June 29 or December 30.
- upon issuance, will be direct, unconditional and general obligations of
the Republic and will rank equally with our other external debt
denominated in currencies other than Turkish Lira which is (i) payable
to a person or entity not resident in Turkey and (ii) not owing to a
Turkish citizen. See "Debt Securities -- Status of the Debt Securities"
and "Debt Securities -- Negative Pledge" in the accompanying
prospectus.
- will be recorded on, and transferred through, the records maintained by
DTC and its direct and indirect participants, including Euroclear and
Clearstream Banking Luxembourg.
- will be issued in fully registered form, without coupons, registered in
the names of investors or their nominees in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.
- will only be available in definitive form under certain limited
circumstances.
PAYMENTS OF PRINCIPAL AND INTEREST
The Republic will make payments of principal and interest on the notes
in U.S. dollars through the fiscal agent to DTC, which will receive the funds
for distribution to the beneficial holders of the notes. The Republic expects
that holders of the notes will be paid in accordance with the procedures of DTC
and its direct and indirect participants.
FISCAL AGENT
The fiscal agency agreement contains provisions relating to the
obligations and duties of the fiscal agent, to the indemnification of the fiscal
agent and to the fiscal agent's relief from responsibility for actions that it
takes.
S-11
<PAGE>
PAYING AGENTS; TRANSFER AGENTS; REGISTRAR
The Republic has initially appointed JPMorgan Chase Bank as paying
agent, transfer agent and registrar. The Republic may at any time appoint new
paying agents, transfer agents and registrars. The Republic, however, will at
all times maintain:
- a principal paying agent in New York City, and
- a registrar in New York City or another office as designated by the
fiscal agent.
The Republic will not appoint a paying and transfer agent in Luxembourg
until such time, if any, as the notes are listed on the Luxembourg Stock
Exchange and definitive notes are issued. The Republic will, when the notes are
listed on the exchange, appoint Kredietbank S.A. Luxembourgeoise as its special
agent in Luxembourg for so long as the notes are in book-entry form, and, upon
the issuance of definitive notes, the Republic will appoint a transfer and
paying agent located in Luxembourg. The special agent or, as the case may be,
the transfer and paying agent in Luxembourg will act as an intermediary between
the holders and the Republic. So long as the notes are listed on the exchange,
the Republic will maintain a special agent or a paying and transfer agent in
Luxembourg. The holder may transfer a note in definitive form when the note is
presented at the specified offices of the registrar or the transfer agent,
together with any other evidence that they may require. In the case of a
transfer of part of a note, the registrar or transfer agent will issue a new
note in definitive form to the transferee and a second note in respect of the
balance of the note to the transferor.
DEFINITIVE NOTES
The Republic will issue notes in definitive form only if DTC is
unwilling or unable to continue as depositary, is ineligible to act as

depositary, or ceases to be a "clearing agency" registered under the Securities
Exchange Act of 1934.
Payments will be made on any definitive notes at the global trust
services office of the fiscal agent in New York City or the paying agent in
Luxembourg. You will not be charged a fee for the registration of transfers or
exchanges of definitive notes. You may transfer any definitive registered note,
according to the procedures in the fiscal agency agreement, by presenting and
surrendering it at the office of any transfer agent. The fiscal agent will
exchange without charge definitive notes of the same series of authorized
denominations of like tenor as the portion of the global note submitted for
exchange.
The Republic will replace any mutilated, destroyed, stolen or lost note
or coupon at your expense upon delivery to the fiscal agent or the transfer
agent in Luxembourg of the note or coupon or evidence of its destruction, loss
or theft satisfactory to the Republic and the fiscal agent, who may also require
an indemnity at your expense.
NOTICES
Notices will be sent to DTC, or its nominee, as the holder thereof, and
DTC will communicate these notices to DTC participants in accordance with its
standard procedures.
If and for so long as the notes are listed on the Luxembourg Stock
Exchange and the rules of that exchange so require, the Republic will also
publish notices to the holders of the notes in a leading newspaper having
general circulation in Luxembourg. The Republic expects that it will initially
make such publication in the Luxemburger Wort.
The Republic will cause notice of any resignation, termination or
appointment of any paying agent or transfer agent or the fiscal agent and of any
change in the office through which such agent will act to be given as provided
under this subsection.
S-12
<PAGE>
FURTHER ISSUES OF THE NOTES
The Republic may, without the consent of the holders of the notes,
create and issue further notes with the same terms and conditions as the notes
(or the same except for the amount of the first interest payment and the issue
price).
PURCHASE OF NOTES BY THE REPUBLIC
The Republic may at any time purchase any of the notes in any manner
and at any price. If purchases are made by tender, tenders must be available to
all holders of the notes alike. All notes that are purchased by or on behalf of
the Republic may be held by the Republic or surrendered to the fiscal agent for
cancellation, but may not be resold.
GENERAL INFORMATION
1. The Republic has full power and authority to issue securities, such
as the notes, outside Turkey for any and all purposes, under Article 4 and
Article 7 of the Law of the Republic Regarding the Regulation of Public Finance
and Debt Management (Law No. 4749).
2. The Republic has applied to list the notes on the Luxembourg Stock
Exchange in accordance with its rules.
3. The notes have been accepted for clearance through DTC, Euroclear
and Clearstream Banking Luxembourg (Common Code: 016105147; ISIN No.:
US900123AR10; CUSIP No.: 900123AR1).
4. If and for so long as the notes are listed on the Luxembourg Stock
Exchange and the rules of the exchange so require, copies of the fiscal agency
agreement, this prospectus supplement, the accompanying prospectus, including
the documents incorporated therein by reference, and all other documents filed
by the Republic with the SEC in connection with the registration statement of
which this prospectus supplement is a part will be available free of charge at
the offices of the special agent in Luxembourg. The Republic will promptly
provide notice of the termination or appointment of, or of any change in the
office of, any paying agent, transfer agent, special agent or registrar.
5. The Republic has represented and warranted that as of the offering
date no litigation or administrative proceeding is pending or, to its knowledge,
threatened against or affecting it (a) in which there is a reasonable
possibility of an adverse decision that would materially affect its ability to
perform its obligations in respect of the fiscal agency agreement or the notes
or (b) that questions the legality, validity or binding effect of the fiscal
agency agreement or the notes.
S-13
<PAGE>
GLOBAL CLEARANCE AND SETTLEMENT
The Republic has obtained the information in this section from sources
it believes to be reliable, including from DTC, Euroclear and Clearstream
Banking Luxembourg, but the Republic takes no responsibility for the accuracy of
this information. DTC, Euroclear and Clearstream Banking Luxembourg are under no
obligation to perform or continue to perform the procedures described below, and
they may modify or discontinue them at any time. Neither the Republic nor the
registrar will be responsible for DTC's, Euroclear's or Clearstream Banking
Luxembourg's performance of their obligations under their rules and procedures;
nor will the Republic or the registrar be responsible for the performance by
direct or indirect participants of their obligations under their rules and
procedures.
INTRODUCTION
The Depository Trust Company
DTC is:
- A limited-purpose trust company organized within the meaning of the New

York Banking Law;
- a "banking organization" under the New York Banking Law;
- a member of the Federal Reserve System;
- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
- a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934.
DTC was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between its
participants. It does this through electronic book-entry changes in the accounts
of its direct participants, eliminating the need for physical movement of
securities certificates. DTC is owned by a number of its direct participants and
by the New York Stock Exchange, Inc., the NASDAQ, the American Stock Exchange
and the National Association of Securities Dealers, Inc.
According to DTC, the foregoing information about DTC has been provided
to us for informational purposes only and is not a representation, warranty or
contract modification of any kind.
Euroclear and Clearstream Banking Luxembourg
Like DTC, Euroclear and Clearstream Banking Luxembourg hold securities
for their participants and facilitate the clearance and settlement of securities
transactions between their participants through electronic book-entry changes in
their accounts. Euroclear and Clearstream Banking Luxembourg provide various
services to their participants, including the safekeeping, administration,
clearance and settlement and lending and borrowing of internationally traded
securities. Euroclear and Clearstream Banking Luxembourg participants are
financial institutions such as underwriters, securities brokers and dealers,
banks, trust companies and other organizations. The underwriters are
participants in Euroclear or Clearstream Banking Luxembourg. Other banks,
brokers, dealers and trust companies have indirect access to Euroclear or
Clearstream Banking Luxembourg by clearing through or maintaining a custodial
relationship with Euroclear or Clearstream Banking Luxembourg participants.
Ownership of Notes through DTC, Euroclear and Clearstream Banking Luxembourg
The Republic will issue the notes in the form of a fully registered
book-entry security, registered in the name of Cede & Co., a nominee of DTC.
Financial institutions, acting as direct and indirect participants in DTC, will
represent your beneficial interests in the book-entry security. These financial
institutions will record the ownership and transfer of your beneficial interests
through book-entry accounts.
S-14
<PAGE>
You may hold your beneficial interests in the book-entry security through
Euroclear or Clearstream Banking Luxembourg, if they are participants in such
systems, or indirectly through organizations that are participants in such
systems. Euroclear and Clearstream Banking Luxembourg will hold their
participants' beneficial interests in the book-entry security in their
customers' securities accounts with their depositaries.
These depositaries of Euroclear and Clearstream Banking Luxembourg in
turn will hold such interests in their customers' securities accounts with DTC.
The Republic and the fiscal agent generally will treat the registered
holder of the notes, initially Cede & Co., as the absolute owner of the notes
for all purposes. Once the Republic and the fiscal agent make payments to the
registered holders, the Republic and the fiscal agent will no longer be liable
on the notes for the amounts so paid. Accordingly, if you own a beneficial
interest in the book-entry security, you must rely on the procedures of the
institutions through which you hold your interests in the book-entry security
(including DTC, Euroclear, Clearstream Banking Luxembourg, and their
participants) to exercise any of the rights granted to the holder of the
book-entry security. Under existing industry practice, if you desire to take any
action that Cede & Co., as the holder of such book-entry security, is entitled
to take, then Cede & Co. would authorize the DTC participant through which you
own your beneficial interest to take such action, and that DTC participant would
then either authorize you to take the action or act for you on your
instructions.
DTC may grant proxies or authorize its participants (or persons holding
beneficial interests in the notes through such participants) to exercise any
rights of a holder or take any other actions that a holder is entitled to take
under the fiscal agency agreement or the notes. Euroclear's or Clearstream
Banking Luxembourg's ability to take actions as a holder under the notes or the
fiscal agency agreement will be limited by the ability of their respective
depositaries to carry out such actions for them through DTC. Euroclear and
Clearstream Banking Luxembourg will take such actions only in accordance with
their respective rules and procedures.
The fiscal agent will not charge you any fees for the notes, other than
reasonable fees for the replacement of lost, stolen, mutilated or destroyed
notes. However, you may incur fees for the maintenance and operation of the
book-entry accounts with the clearing systems in which your beneficial interests
are held.
TRANSFERS WITHIN AND BETWEEN DTC, EUROCLEAR AND CLEARSTREAM BANKING LUXEMBOURG
Trading Between DTC Purchasers and Sellers
DTC participants will transfer interests in the notes among themselves
in the ordinary way according to DTC rules. DTC participants will pay for such
transfers by wire transfer. The laws of some states require certain purchasers
of securities to take physical delivery of the securities in definitive form.
These laws may impair your ability to transfer beneficial interests in the notes
to such purchasers. DTC can act only on behalf of its direct participants, who
in turn act on behalf of indirect participants and certain banks. Thus, your
ability to pledge a beneficial interest in the notes to persons that do not
participate in the DTC system, and to take other actions, may be limited because
you will not possess a physical certificate that represents your interest.

Trading Between Euroclear and/or Clearstream Banking Luxembourg Participants
Participants in Euroclear and Clearstream Banking Luxembourg will
transfer interests in the notes among themselves in the ordinary way according
to the rules and operating procedures of Euroclear and Clearstream Banking
Luxembourg.
Trading Between a DTC Seller and a Euroclear or Clearstream Banking Luxembourg
Purchaser
When the notes are to be transferred from the account of a DTC
participant to the account of a Euroclear or Clearstream Banking Luxembourg
participant, the purchaser must first send instructions to Euroclear or
Clearstream Banking Luxembourg through a participant at least one business day
prior to the
S-15
<PAGE>
settlement date. Euroclear or Clearstream Banking Luxembourg will then instruct
its depositary to receive the notes and make payment for them. On the settlement
date, the depositary will make payment to the DTC participant's account and the
notes will be credited to the depositary's account. After settlement has been
completed, DTC will credit the notes to Euroclear or Clearstream Banking
Luxembourg, Euroclear or Clearstream Banking Luxembourg will credit the notes,
in accordance with its usual procedures, to the participant's account, and the
participant will then credit the purchaser's account. These securities credits
will appear the next day (European time) after the settlement date. The cash
debit from Euroclear's or Clearstream Banking Luxembourg's account will be
back-valued to the value date (which will be the preceding day if settlement
occurs in New York). If settlement is not completed on the intended value date
(i.e., the trade fails), the cash debit will instead be valued at the actual
settlement date.
Participants in Euroclear and Clearstream Banking Luxembourg will need
to make funds available to Euroclear or Clearstream Banking Luxembourg in order
to pay for the notes by wire transfer on the value date. The most direct way of
doing this is to pre-position funds (i.e., have funds in place at Euroclear or
Clearstream Banking Luxembourg before the value date), either from cash on hand
or existing lines of credit. Under this approach, however, participants may take
on credit exposure to Euroclear and Clearstream Banking Luxembourg until the
notes are credited to their accounts one day later.
As an alternative, if Euroclear or Clearstream Banking Luxembourg has
extended a line of credit to a participant, the participant may decide not to
pre-position funds, but to allow Euroclear or Clearstream Banking Luxembourg to
draw on the line of credit to finance settlement for the notes. Under this
procedure, Euroclear or Clearstream Banking Luxembourg would charge the
participant overdraft charges for one day, assuming that the overdraft would be
cleared when the notes were credited to the participant's account. However,
interest on the notes would accrue from the value date. Therefore, in many cases
the interest income on notes which the participant earns during that one-day
period will substantially reduce or offset the amount of the participant's
overdraft charges. Of course, this result will depend on the cost of funds
(i.e., the interest rate that Euroclear or Clearstream Banking Luxembourg
charges) to each participant.
Since the settlement will occur during New York business hours, a DTC
participant selling an interest in the notes can use its usual procedures for
transferring notes to the depositaries of Euroclear or Clearstream Banking
Luxembourg for the benefit of Euroclear or Clearstream Banking Luxembourg
participants. The DTC seller will receive the sale proceeds on the settlement
date. Thus, to the DTC seller, a cross-market sale will settle no differently
than a trade between two DTC participants.
Trading Between a Euroclear or Clearstream Banking Luxembourg Seller and DTC
Purchaser
Due to time zone differences in their favor, Euroclear and Clearstream
Banking Luxembourg participants can use their usual procedures to transfer notes
through their depositaries to a DTC participant. The seller must first send
instructions to Euroclear or Clearstream Banking Luxembourg through a
participant at least one business day prior to the settlement date. Euroclear or
Clearstream Banking Luxembourg will then instruct its depositary to credit the
notes to the DTC participant's account and receive payment. The payment will be
credited in the account of the Euroclear or Clearstream Banking Luxembourg
participant on the following day, but the receipt of the cash proceeds will be
back-valued to the value date (which will be the preceding day if the settlement
occurs in New York). If settlement is not completed on the intended value date
(i.e., the trade fails), the receipt of the cash proceeds will instead be valued
at the actual settlement date.
If the Euroclear or Clearstream Banking Luxembourg participant selling
the notes has a line of credit with Euroclear or Clearstream Banking Luxembourg
and elects to be in debit for the notes until it receives the sale proceeds in
its account, then the back-valuation may substantially reduce or offset any
overdraft charges that the participant incurs over that one-day period.
Finally, a day trader that uses Euroclear or Clearstream Banking
Luxembourg and that purchases notes from a DTC participant for credit to a
Euroclear or Clearstream Banking Luxembourg accountholder should bond that these
trades would automatically fail on the sale side unless affirmative action were
taken. At least three techniques should be readily available to eliminate this
potential problem:
S-16
<PAGE>
(a) borrowing through Euroclear or Clearstream Banking Luxembourg for
one day (until the purchase side of the day trade is reflected in its Euroclear
or Clearstream Banking Luxembourg account) in accordance with the clearing
system's customary procedures;
(b) borrowing the notes in the United States from a DTC participant no
later than one day prior to settlement, which would give the notes sufficient
time to be reflected in the borrower's Euroclear or Clearstream Banking
Luxembourg account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC participant is at least one