Baku, Azerbaijan, July 26
By Aygun Badalova - Trend:
The European Bank for Reconstruction and Development (EBRD) invests TRY 70 million (approximately €21 million equivalent) in a four-year bond issued by the Turkish industrial conglomerate YDA İnşaat Sanayi ve Ticaret A.Ş (YDA), EBRD reported.
The senior unsecured local currency bond is part of a TRY 250 million (approximately €74 million equivalent) issuance in two equal tranches, with four- and two-year maturities respectively, according to the report.
The four-year tranche uses the Turkish Lira Interbank Offer Rate (TRLIBOR) as its benchmark rate, which allows for effective interest rate hedging and wider investor participation.
The bond is being raised to finance a state-of-the-art hospital in the central Anatolian city of Konya and to refinance part of YDA’s short-term debt. The hospital will be built by a construction subsidiary of YDA as part of a public-private partnership (PPP) under which the private developer will provide building maintenance and non-clinical services, while the medical services will be provided by the Turkish Ministry of Health.
The EBRD has previously arranged a €147.5 million syndicated loan for the development of the Konya hospital. It is expected to become operational in 2019.
This is the EBRD’s second investment in YDA bonds and comes under the Bank’s TRY 700 program.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. 98 percent of the bank’s investments in the country are in the private sector.
To date, the EBRD has invested over €7 billion through more than 180 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised about €17 billion for these ventures from other sources of financing.