New boost for Turkish capital markets as EBRD invests in lira-denominated Migros bond

By Olga Rosca
@olgarosca

EBRD backs lira-denominated debut bond issued by Turkish retailer Migros

  • EBRD invests TRY 40 million in Migros’ Turkish-lira denominated bond
  • Investment supports alternative source of finance as bank lending tightens in Turkey
  • Deepening local currency and capital markets in the country a priority for EBRD

In a new boost for Turkey’s local currency and capital markets, the EBRD has invested TRY 40 million in a  TRY 200 million bond issued by the country’s leading supermarket operator, Migros.

Migros operates in 81 Turkish provinces, through a network of 2,040 food retail stores under the Migros, M-Jet, 5M and Macrocenter banners.

This is the third time the company has tapped debt capital markets in Turkey and builds on the success of previous bonds in 2018, also backed by the EBRD. The new Turkish-lira denominated bond will be listed on Borsa Istanbul and its proceeds will reduce the company’s foreign currency exposure.

The EBRD’s support for Migros’ bonds promotes debt capital markets as an alternative source of financing at a time when bank lending conditions are tightening in Turkey.

In December 2018, the EBRD also provided a TRY loan to Migros, worth the equivalent of €60 million. The Bank remains committed to further expanding access to long-term lira funding for Turkish companies, making them more resilient to macro-economic vulnerabilities.

Last year the EBRD increased its support for local currency financing in Turkey to a third of its total investment in the country as an economic slowdown and a dramatic currency depreciation affected many private sector companies.

The Bank is a leading institutional investor in Turkey and has invested over €11 billion in 283 projects in Turkey since 2009, with a focus on investment in sustainable energy, improving infrastructure, strengthening the competitiveness of the private sector, deepening capital and local currency markets, and promoting regional and youth inclusion and gender equality. The overwhelming majority of EBRD investments in Turkey are in the private sector.