Call us on
+44 (0) 207 045 0920

Middle East

CASE STUDY: YDA Pushes Tenors on Local Currency Trade

YDA raised four-year money – pushing average tenors in Turkey’s local currency market – just one week after the coup attempt and two days after S&P downgraded the country’s sovereign credit rating to junk.

Feb 27, 2017 // 2:45PM

Deal At A Glance

Deal Type: Local Currency Bond

Issuer: YDA Insaat Sanayi ve Ticaret A.S.

Rating: TRAA

Listing: Borsa Istanbul Debt Securities Market - Outright Purchases and Sales Market

Governing Law: Turkish Law

MLA: AK Investment

Anchor Investor: European Bank for Reconstruction and Development

Legal Adviser to Issuer: Gunduz Hukuk Borosu

Legal Adviser to Anchor Investor: Bezen & Partners

Size: TRY250mn

Issue Date: July 2016

Maturity Date: (1) July 2018; (2) July 2020

Yield: (1) 13.2474%; (2) 14.2880%

Spread: (1) Turkish 2-Year Benchmark Government Bond + 3.50%; (2) 3-Month TRLIBOR + 3.50%

Use of Proceeds: General corporate purposes, refinancing and providing equity supplies  for new PPP projects


YDA Insaat Sanayi ve Ticaret A.S. sought to raise long-term funding through the country’s local capital markets in order to refinance existing debt and provide equity supplies for new PPP projects.

These were the key drivers behind the company’s TRY250mn issuance, a notable deal for its timing and execution, tenor, and deal size.

Two of primary objectives for the deal were to push the tenor beyond the two-year mark, and price the deal in against the TRLibor in a bid to eliminate non-hedgeable interest rate exposure – both of which were achieved against a backdrop of significant volatility following the coup attempt and S&P sovereign credit rating downgrade.

Transaction Breakdown

Following a week-long deal roadshow with 21 different institutional investors in Turkey and Europe, YDA issued TRY250mn, split equally between 2-year and 4-year tranches.

This was the company’s first bond issue and only the third in the Turkish market to be based on TRLibor as    a reference point, representing an important step in terms of using a reference rate, demonstrating the use   of a different index in the market and eliminating non- hedgeable interest rate exposure.

With bond tenors in Turkey typically concentrated around two years, and limited 3-year issuances during the period between 2010 and 2015, it was notable to see YDA raise 4-year money – and impressive, given the timing of the execution. 

The deal launched on 22 July, just one week after the coup attempt, and two days after S&P downgraded the country’s sovereign rating to junk. It is currently the longest tenor achieved on a local currency corporate bond in Turkey, and the biggest single TRY- denominated issuance in 2016.

YDA also worked closely with the EBRD to improve its disclosure practices in a bid to increase its attractiveness to foreign investors, and set a benchmark for other corporates in the country.

In terms of investor uptake, 60% of the notes were picked up by domestic institutional investors, 28% international institutional investors, and 12% domestic retail investors.

Middle East Projects & Infrastructure CEE & Turkey CEEMEA

Bonds & Loans is a trusted provider of news, analysis, and commentary that helps illuminate the most significant issues, events and trends impacting the global emerging credit markets.

Recommended Stories