A Stationery Company's 43 Percent Interest Rate

A Turkish stationery company just paid out TL 80.4 million in interest on a single coupon reset. The periodic rate was 10.72% for a three-month period, which annualizes to roughly 43%. The issuer makes pencils.

That was odd enough as a standalone fact. But the mechanism behind it is more interesting than the headline number. Adel Kalemcilik — Turkey's largest stationery manufacturer, a subsidiary of the AG Anadolu Grubu conglomerate — issued a TL 750 million floating-rate financing bill with a 364-day maturity and quarterly coupon resets. The first coupon landed today, August 7, 2026.

The basic point is that this isn't a corporate bond in any traditional sense. It's a floating-rate note tied to Turkey's overnight interbank rate, which means the company's borrowing cost is basically the central bank's policy rate plus a small credit spread. The spread is the story. The stationery company is what gives the instrument its name and its exchange listing. The rate is set by the Central Bank of Turkey and the geopolitics keeping it there.

Here's how the plumbing works. Turkey's central bank keeps its one-week repo rate at 37%, but since February — when the US-Iran conflict erupted and oil jumped from $72 to near $100 a barrel — it has stopped funding through that window and is lending overnight at the top of its corridor: 40%. Interbank rates, including the TREPS reference rates that corporate floating-rate bills typically track, are clustered near that upper bound. So the market rate for short-term Turkish money is roughly 40%.

Adel's quarterly reset of 10.72% translates to about 42.9% annualized. The extra 3 percentage points or so over the overnight rate is the credit spread investors demanded to hold paper from a pencil company. That's not an outrageous corporate risk premium. It's sort of what you'd expect in a market where liquidity is tight, inflation ran at 32.6% in May, and the central bank has held rates steady for four consecutive meetings while monitoring whether the war drives prices higher still.

The last reset, on May 22, was 10.56% for the period, or about 42.2% annualized, for a TL 79.2 million payment. The rate ticked up a bit for the current period, reflecting marginally tighter interbank conditions as the central bank continued to fund through the 40% ceiling rather than the 37% policy rate. (The repo window has been closed since the conflict began, effectively keeping a stealth rate hike in place.)

This isn't even Adel's only floating obligation. The company's Q1 2026 financial report references another floating-rate instrument bearing 40.75%, maturing November 25, 2026, with principal and all accrued interest paid at maturity — a bullet structure, which means no interim coupons to give investors an exit ramp. Earlier this year the company also issued and repaid a TL 500 million 364-day floating bill and a smaller TL 250 million bond. The pattern is clear: Adel has been aggressively rolling short-term floating-rate paper through what has become one of the most expensive corporate borrowing environments in the emerging-market world.

So who is actually buying this? The TL corporate bond market in Turkey has deepened meaningfully over the past few years, with pension funds, insurance companies, and local banks looking for local-currency yield that keeps pace with inflation. A floating-rate bill from a blue-chip subsidiary of one of Turkey's largest conglomerates is a natural home for that capital. The investor is essentially getting the central bank's overnight rate, plus a small corporate spread, plus the optionality of floating coupons that adjust if rates move. In a country where inflation expectations for the next 12 months sit at 24%, a floating instrument at ~43% sounds like it preserves real value. That's the pitch.

The risk, of course, lives in the gap between the label and the economic reality. The official classification is a corporate financing bill. In practice, it's a pass-through of central bank policy risk, with a thin layer of corporate credit on top. If the central bank raises rates again — and it has signaled willingness to tighten further if inflation worsens — the coupon goes up. The investor's floating exposure means they aren't burned by rising rates. But the company's cost of funding also rises, and there's no hedge in that contract. Conversely, if the war eases and rates fall, the coupon resets lower, but the spread may widen if investors reassess the company's risk profile. (Worth noting: in April 2026, Borsa Istanbul banned short selling and credit transactions on ADEL shares under its VBTS volatility regime — a signal the exchange itself thought the stock needed a circuit breaker.)

The stock currently trades at about 32.4 lira, roughly half its 52-week high of 61.15 lira. Whether that reflects fundamental pressure, short-term technical stress, or the market working through the arithmetic of what it costs to borrow in Turkey right now is harder to say. What the numbers do show is that Adel's capital structure is heavily indexed to whatever happens next in monetary policy. The company that makes pencils under the Faber-Castell and Adel brands is, in financial terms, a leveraged bet on whether the Central Bank of Turkey thinks 40% is enough to hold inflation down.

The simplest model is: a domestic company with steady operating cash flow uses short-dated floating paper to fund working capital or capex, knowing its borrowing cost will track the policy rate. That's a perfectly rational funding model when inflation is high and fixed-rate debt would lock in an unknown real cost. The question is whether the operating margins of a stationery manufacturer can stay ahead of a 43% cost of capital for long. The answer to that determines whether this structure is a smart liquidity play or a slow bleed.