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The European Bank for Reconstruction and Development (EBRD) will invest 70 million Turkish liras (about €21 million) in a four-year bond to a major Turkish contractor to finance a state-of-the-art hospital, the bank announced Monday.
The EBRD is strengthening Turkey's capital markets by investing in the country's longest tenor corporate bond. 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, the bank said in a statement.
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, said the statement.
"We sincerely thank all our local and foreign investors, primarily the EBRD, for their trust in us and the Turkish economy, enabling us to improve market sentiment through this issuance," Huseyin Arslan, chair of the YDA Group contractor, said. "A four-year tenor for a corporate bond is an important achievement for the local bond market, and we are grateful to the investors who supported this issuance despite the latest developments in local and foreign markets."
The bond issued by YDA will be used to build a mega-hospital through a public-private partnership (PPP) in Konya, Turkey's seventh-largest city. Construction, maintenance, and non-clinical services will be YDA's responsibility, while medical services will be provided by the Turkish Health Ministry.
The bank previously arranged a €147.5 million syndicated loan for the development of the high-tech Konya hospital, expected to become operational in 2019.
The European Bank for Reconstruction and Development's decision came in the wake of the July 15 coup attempt, which shook the Turkish economy and led to speculation of rate cuts from international credit rating agencies that largely stayed rumors. -
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