The FINANCIAL — The EBRD is taking part in a bond issue from leading Turkish conglomerate Doğuş Holding with an investment that aims to strengthen the local corporate bond market and attract more institutional investors to Turkey.
The EBRD is investing 100 million Turkish lira (€24 million equivalent) in a four-year TRY 350 million (approximately €84.2 million equivalent) floating rate note. The issue is using the Turkish Lira Interbank Offer Rate (TRLIBOR) as a benchmark, allowing for effective interest rate hedging and wider participation by investors.
The Bank’s participation comes under a dedicated EBRD framework that has been created to support the widening and deepening of the local currency corporate bond market in Turkey. The goal is to attract other institutional investors to the market by raising the standards of bonds issued by corporate investors in terms of transparency, disclosure and rating.
The EBRD is also boosting financial innovation with the promotion of floating rate bonds.
The Doğuş bond is part of a TRY 1 billion bond programme with which the company is raising funds to expand and consolidate its activities, according to EBRD.
The family-owned holding is active in seven sectors: food and beverages, automotive, construction, media, tourism, real estate, media and energy.
Jean Patrick Marquet, EBRD Managing Director, Turkey, said: “This is a very important transaction for Turkey, for the country’s capital market and for Doğuş Holding. The EBRD is proud to be part of this as it allows us to play an active role in strengthening both the corporate sector, through the provision of new funds, and the development of the capital market, through extending the maturities beyond market level. Where the EBRD leads, we hope others will soon be able to follow.”
Hüsnü Akhan, CEO of Doğuş Group, commented: “This issuance is an important achievement for the local bond market in terms of tenor and size. We thank the EBRD for their valuable contribution and support for the further development of Turkey’s capital markets.”
The EBRD started investing in Turkey in 2009. The country is a top destination for the Bank’s finance, with €1.9 billion invested in 2016 alone.