Istanbul-listed TSKB sells $300mn of 5-year green eurobonds at 9.375% coupon

By Akin Nazli in Belgrade September 21, 2023

Industrial Development Bank of Turkey (TSKB) has sold $300mn of sustainable eurobonds (XS2678232781) due 2028 at a coupon rate of 9.375% (a spread of 487bp over US Treasuries) and a yield of 9.50%, the lender said on September 20.

Bank ABC (Arab Banking Corporation/Bahrain/ABC) International Bank plc, BNP Paribas (Paris/BNP), Citibank (Citigroup/New York/C), Commerzbank (Frankfurt/CBK), ING Bank (Amsterdam/INGA), SMBC (Sumitomo Mitsui Banking Corporation/Tokyo/8316Nikko, Standard Chartered Bank (London/STAN) and Morgan Stanley (New York/MSacted as intermediaries in the deal.

In 2021, TSKB sold $350mn of 5-year sustainable eurobonds (XS2281369301) at a coupon rate of 5.875% (a spread of 539bp over US Treasuries).
 

TSKB's outstanding eurobonds
Issuer ISIN Coupon Volume (mn) Issuance Maturity
TSKB (TSKB) XS2100270508 6.00% 400 Jan 15, 2020 Jan 22, 2025
TSKB (TSKB) XS2281369301 5.875% $350 Jan 8, 2021 Jan 14, 2026
TSKB (TSKB) (subordinated) XS1584113184 7.625% $300 RECALLED Mar 29, 2027(/22)
TSKB (TSKB) XS2678232781 9.375% 300 Sep 19, 2023 Oct 19, 2028

 

Table: TSKB's outstanding eurobonds.

In line with local peers, TSKB, the 12th largest bank in Turkey with Turkish lira (TRY) 147bn ($5bn) of total assets at end-June, has a B-/Negative (one notch below Turkey’s sovereign rating and six notches below investment grade) from Fitch Ratings and a B3/Stable (six notches below investment grade in line with Turkey’s sovereign rating) from Moody’s Investors Service.

On September 8, Fitch updated Turkey’s sovereign outlook to stable. Updates for corporate outlooks will follow soon.

Isbank (ISCTR) Group companies hold a 51% stake in TSKB while government-run Vakifbank (VAKBN) holds 8%. A stake of 39% is listed on Borsa Istanbul.

On September 13, Yapi Kredi Bank (YKBNK), a unit of Turkish conglomerate Koc Holding (KCHOL), sold $500mn of sustainable eurobonds (XS2445343689) due 2028 at a coupon rate of 9.25% (a spread of 486bp over US Treasuries) and a yield of 9.25%.

On September 12, Vakifbank sold $750mn of sustainable eurobonds (XS2677517497) due 2028 at a coupon rate of 9% (a spread of 464bp over US Treasuries) and a yield of 9.125%.

Turkey’s five-year credit default swaps (CDS) remain below the 400 level, while the yield on the Turkish government’s 10-year eurobonds remains below the 9% level.

In May, unnamed sources told Bloomberg that Turkey’s central bank asked some local lenders to buy the country’s dollar bonds to prevent a CDS spike.

Sentiment on the global markets, meanwhile, remains turbulence-free.

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