Strong example for longer tenor bond issuances
The European Bank for Reconstruction and Development (EBRD) is investing in a Turkish-lira denominated bond issued by Aksa Enerji, a local company engaged in the production and sale of energy, in a move to boost an independent power producer and deepen Turkish capital markets.
The EBRD is an anchor investor in this TRY 200 million (€60.6 million) bond. The Bank’s participation will be a TRY 100 million investment in the first three-year tranche worth a total of TRY 140. This first tranche will use TRLIBOR, the Turkish Lira Interbank Offered Rate, as the benchmark rate. The issuance is part of the company’s TRY 500 million (€152 million) bond programme.
The proceeds will cover Aksa Enerji’s funding needs and support the currency composition of its balance sheet.
To date, the company has financed its investments through long term corporate and project finance loans, mostly in foreign currency. In order to diversify its funding base and reduce foreign exchange rate risk, it has decided to tap the markets through this bond programme. For this transaction, investment brokerage company Ak Yatırım Menkul Değerler A.Ş. acted as lead arranger.
Nandita Parshad, EBRD Director for Power and Energy, said: “This EBRD investment aims to help Aksa Enerji to diversify its funding sources and mobilise investor interest for future bonds. We also hope this will be a strong example for other corporates in the market to increase the average tenor of bond issuances.”
Nesim Ibrahimhakkioglu, CFO at Aksa Enerji, said: “This deal is one of the biggest corporate bond issuances in 2016 in Turkey and was successfully completed last Friday.”
Aksa Enerji has a diversified energy generation portfolio of over 2.2 GW including natural gas, fuel oil, hydroelectric power plants and wind parks in Turkey and abroad. In 2015, the company’s sales volume accounted for 4.8 per cent of Turkey’s total annual electricity consumption and 10.4 per cent of the electricity sales volume by independent power producers.
Investment in Aksa Enerji’s bond issuance is the second transaction under the EBRD’s recently approved TL 700 million programme dedicated to supporting Turkish lira-denominated bonds.
The Bank’s investments under this programme promote longer tenor and greater transparency and aim to attract a wider pool of international investors to Turkish capital markets. Developing debt and equity capital markets in Turkey is one of the EBRD’s top priorities there, as set out in the Bank’s strategy for Turkey.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep.
To date, it has invested over €7 billion in the country through more than 180 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised about €17 billion for these ventures from other sources of financing.