Tofas Turk Otomobil Fabrikasi A.S. sought to raise new funds to invest in the production of the new Agea passenger car family of Tofas. This project was very important for the company and for the Turkish automotive industry.
After mandating banks in April 2015, the company successfully secured a competitively priced 7-year €200mn facility with ECA cover provided by Italy’s SACE.
The 7-year €200mn facility carried a yield of 6MEURIBOR+240bp and was equally participated by HSBC Bank ING-Diba AG.
The transaction was structured as a club deal with export guarantee cover provided by Italian ECA SACE. It carries a tenor of 6.5 years with a 6-month grace period. The loan’s capital and interest rate payments are scheduled to be made every six months to September 2022.
It was strategically significant for the company, and the development of the automotive industry in Turkey. The Agea model is expected to be the backbone of Tofas’ passenger car sales in the coming years, with the company looking to sell up to 1.3 million new passenger vehicles (sedans, hatchbacks and station wagons) by 2023.
Additionally, half of the Agea models produced will be exported to Europe – with Fiat retailing the vehicle under a guaranteed purchase agreement, an element that improved that bankability of the deal and attracted the support of SACE.
The deal was the largest ECA backed transaction for a Turkish corporate in 2015 and was inked against a backdrop of increasing volatility for emerging markets.