Cimko Cimento on May 14 sold $300mn of debut eurobonds (XS3045389700) due 2030 at a coupon rate of 10.75% and a yield-to-investor of 11% (priced at 99.106), Cbonds reported on May 19.

Emirates NBD Bank and ING Bank (Amsterdam/INGA) acted as intermediaries in the deal.

EBRD makes $50mn purchase

Also on May 19, the European Bank for Reconstruction and Development (EBRD) said that it bought $50mn of papers in the auction.

Cimko said it would use some eurobond proceeds to refinance its decarbonisation programme.

Four to five notches below investment grade

Cimko has a B+/Stable rating from Fitch Ratings and a B2/Stable from Moody’s Investors Service.

A unit of Sanko Holding, Cimko intends to utilise the bulk of the proceeds to repay existing debt, according to Fitch.

The $400mn proposed issuance will be used to refinance $295mn of debt maturing in 2025 and 2026, distribute a $40mn dividend and pre-fund $57mn of capital investments, Moody’s said on May 9.

First auction since Imamoglu operation

The auction was the first Turkish eurobond sale to take place since the jailing of Istanbul mayor and candidate for the presidency Ekrem Imamoglu in March. Prior to the regime's move on Imamoglu, Turkish issuers enjoyed eurobond sales in record amounts.

Observers, meanwhile, questioned the role of Cimko’s sale as a market reopener, Global Capital reported on May 15.

Turkey’s CDS fell below the 300-level last week (after hitting the 370s in April). The yield on the Turkish government’s 10-year eurobonds remains above the 7%-level.

In October, Turkish electricity producer Zorlu Enerji (ZOREN), a unit of Zorlu Holding, sold $800mn worth of sustainability-linked debut eurobonds (XS2926261426) at a coupon rate of 11.00% (priced at 100.00).

In November, it sold $200mn of eurobonds via a tap issue at a yield to investor of 10.997%. In March, it  sold an additional $100mn of eurobonds via a second tap issue.

In February, another electricity producer, Limak Renewables, sold $450mn of debut green eurobonds (XS2989570945) at a coupon rate and a yield to investor of 9.625% (priced at 100).

Among largest in Turkey

Cimko, launched in 1995, is among the largest cement makers in Turkey. It has three cement production plants in Adiyaman, Kahramanmaras (Narli) and Bartin provinces along with two packaging plants, more than 40 ready-mix concrete plants, four aggregate plants and one grinding plant.

The company has an annual clinker production capacity of 5.6mn tonnes. It also operates solar plants with a combined capacity of 49-MW.

Gaziantep-based Sanko Holding, launched in 1904 by the Konukoglu family, is active in textiles with Gaziantep-based textile company Sanko Tekstil (a fabric, yarn and towel manufacturer), in packaging with Gaziantep-based Super Film Ambalaj and in the cement industry with Kahramanmaras-based Cimko Cimento.