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CASE STUDY: Rönesans Places First TRLIBOR-Indexed Bond in Turkey

Rönesans Holding’s 3-year TRY200mn floating rate note was the first TRLIBOR-indexed local currency bond in Turkey. The issuance also helped extend average maturities on comparable instruments and helped deepen the country’s capital markets.

Nov 14, 2016 // 10:50AM

Deal At A Glance

Deal Type: Local currency TRLIBOR- indexed  bond

Deal Format: Floating rate note

Location: Turkey

Borrower: Rönesans Holding A.Ş.

Listing: Borsa İstanbul

Sole Bookrunner: AK Investment

Anchor Investor: EBRD

Legal Advisor to Bookrunner/Anchor Investor: Esin Attorney

(Baker  & McKenzie)

Size: TRY200mn

Tenor: 3 years

Coupon: 3.8145% (first quarter)

Issue Price: 100.000%

Issue Date: 29 January 2016

Spread: 3-month TRLIBOR + 350bp

Use of Proceeds: To fund major projects in real estate


In January 2016 Rönesans Holding, one of Turkey’s largest construction and infrastructure companies, sought to continue executing the company’s TRL500mn bond programme, of which two-thirds has already been issued.

The company issued a TRY200mn 3-year floating rate bond, which was the first TRLIBOR-indexed issuance in Turkey, a move that helped address the needs of investors looking for an anchor outside of Turkish government bonds.

Transaction Breakdown

The notes pay a fixed quarterly coupon adjusted by adding a spread over 3-month TRLIBOR.

One of the company’s main objectives was to anchor the price of the issuance to an underlying benchmark outside Turkish government bonds due to declining daily volumes and widening spreads in the debt market.

After several months of backstop testing Rönesans Holding settled on using 3-month TRLIBOR rates for new issues due to its better liquidity, better reflection of market rates and the relative ease of hedging.

The company organised several roadshows with international investors in January, reaching dozens of corporate and institutional clients as well as thousands of qualified individual investors. The company studied the historical spread between 2-year benchmark government bonds and 3-month TRLIBOR spreads, then adjusted it with respect to the term premium after the market sounding exercise was completed.

Over 20 investors, mostly based in Turkey, participated with the issuance, which was oversubscribed nearly 2x. Half of the bond was picked up by the EBRD as part of the Bank’s TRY700mn Corporate Framework, which aims to facilitate the development of the local currency bond market through extending the average tenor of bonds, improve standards of disclosure for all issues to expand the range of investors and support floating rate bonds with hedgeable benchmarking instruments (TRLIBOR).

Ronesans’ bond is the Bank’s first transaction under the EBRD’s Framework, and was also the first TRLIBOR-indexed local currency bond to come out of Turkey – deepening the Turkish capital markets by setting a new benchmark for other issuers.

Middle East CEE & Turkey

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