TSKB held roadshows in London and Frankfurt on 9 and 10 May 2016, respectively, in a bid to take advantage of positive market conditions and issue its first green bond.
On 12 May 2016 TSKB successfully issued a US$300mn 5-year green bond off the back of strong demand from both green and conventional investors.
TSKB’s inaugural green bond saw strong demand from European and offshore US accounts, and generated a strong orderbook totalling close to US$3.6bn – an oversubscription rate of 13X – by the time it issued in the early afternoon of 12 May 2016.
Initial price thoughts (IPT), released at 8:32AM GMT on 12 May, stood at MS+450 bp, which tightened substantially over the course of the day as the orderbook grew. Price guidance was first revised at 10:37AM GMT to MS+425 bp (+/- 12.5 bp) after the note generated orders of close to US$2.4bn.
By 11:40AM GMT, price guidance was revised to MS+400-412.5 bp, and by the time the transaction launched (1:12PM GMT) price tightened further to MS+387.5, resulting in an overall compression of 62.5 bp.
Distribution on the note was well-diversified and saw heavy participation from European accounts. About 44% of orders were placed with investors in the UK, 14% in Switzerland, and 10% in Germany, and 15% in other European countries, with the remaining 17% being placed in offshore US and Middle Eastern accounts.
In terms of investor type, asset managers took the lead placing 38% of orders, followed by private and public banks (30%), supranationals (17%), hedge funds (11%), and other investors (4%). Additionally, the notes captured significant interest from conventional and green investors, which accounted for 65% and 35% of orders respectively.
As the first green bond to be issued by a Turkish FI, the deal helped open up the country’s market by setting a benchmark for others looking to fund green and sustainability projects.