Translated version of this PSD: Turkish
The EBRD is considering an investment of up to TRY120 million (EUR 48 million) in the local currency-denominated unsecured bond issuance programme by LBT Varlik Yonetim A.S. of up to TRY 600 million.
The EBRD financing will be used to finance the acquisition of portfolios of non-performing loans (NPLs) that are expected to be sold by Turkish banks.
The transition impact potential derives from the demonstration of new financing for non-bank issuers, whose issuances have been restricted by a number of factors relating to supply and demand and the development of the local capital market in Turkey.
The investment programme will demonstrate that an issuer can incrementally broaden its investor base and extend its yield curve by establishing a continuity of issuance.
The transaction will also provide the much needed capital for the one of the leading Turkish NPL asset management companies, to take NPLs off of banks’ balance sheets. This is expected to have a beneficial impact on banks’ balance sheets, introduce further efficiency in the NPL market and continue setting of standards of reputable and responsible resolution of NPLs in the country.
The Company is one of the leading NPL asset managers in Turkey, focusing on acquisition and resolution of non-performing loans and receivables from originating financial institutions in the country.
Up to TRY 120 million in bonds issued by the by Company.
Up to TRY 200 million initially, increasing up to TRY 600 million with subsequent future issuance.
Categorised FI. LBT will be required to comply with the EBRD's Performance Requirements 2 and 9 and submit annual environmental and social reports to the EBRD. The Company's NPL collection procedures are implemented based on the UK and US best practices.
At the time of approval of the project, Non-Bank Financial Institutions’ (“NBFIs”) bond issuances in Turkey were largely limited to maximum of one-year maturity. During the course of this project (between 2013-18), to further diversify its funding the Company managed to issue 2-3 year bonds despite at times negative market developments which have impacted the NBFI bond market volume and tenors. EBRD’s participation in a number of the issuances brought depth to the capital markets and provided comfort to other investors through a demonstration effect. The lengthening of the average maturity of the funding base is particularly important for Non-Performing Loan (“NPL”) Asset Management Companies as to better match the underlying NPL portfolios’ repayment maturity profiles. Furthermore, EBRD’s participation in the bond issuances of the Company which ultimately financed NPL purchases from financial institutions in Turkey indirectly contributed to new lending to the real economy.
Mr. Ilker Yoney, Investments Director
Tel: +90 212 355 8012
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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