Vakifbank Covered Bond

Location:

Turkey

Project number:

46104

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

09 Dec 2015

Status:

Signed

PSD disclosed:

28 Apr 2016

Translated version of this PSD: Turkish

Project Description

The European Bank for Reconstruction and Development (EBRD) is investing EUR 50 million in a EUR 500 million covered bond benchmark issuance by Turkish lender VakifBank. The bond is backed by a portfolio of residential mortgages and is the first of its kind in Turkey. The pioneering issuance met strong investor demand and signals the beginning of a covered bond market in the country. The notes are expected to be rated A3 by Moody's.

Project Objectives

The project is part of the "Finance and Advice for Women in Business" programme funded by the European Union, the EBRD and the Republic of Turkey, which is a comprehensive dedicated initiative in Turkey targeting women-led SMEs. EUR 25 million of the funds of this project will be allocated to the programme. Its ultimate goal is to develop a strong women-led SME sector in Turkey by encouraging women's participation in business, facilitating their access to finance and providing advice to women-led SMEs.

EUR 25 million will be used to finance SMEs operating in agribusiness in the priority regions. EBRD supports Vakifbank's lending operations in the agribusiness sector in Turkey and its commitment to expanding agribusiness lending to SMEs particularly in regions where financing for SMEs remains
scarce.

Transition Impact

Under the "Finance and Advice for Women in Business" programme, transition impact will stem from (i) market expansion which will be achieved by increasing the availability of financing for women-owned and women-managed SMEs in Turkey; (ii) financing women-led SMEs through the introduction of new products and processes tailored to cater to the needs of these SMEs which demonstrates that it is not only commercially viable and profitable, but also scalable and replicable; and (iii) transfer of skills by providing capacity building, product development and marketing outreach support.

Under the agricultural lending component, transition impact will stem from market expansion by providing medium term financing to Vakifbank to help it prioritise the SMEs operating in agribusiness sector through its networks in the regions.

Client Information

TURKIYE VAKIFLAR BANKASI T.A.O.

Vakifbank, listed on Borsa Istanbul, is a full-service commercial and retail bank in Turkey with a wide
regional network. The bank is semi-state owned (58% ownership by Turkey's General Directorate of
Foundations) and is the seventh largest bank in the country with total consolidated assets of EUR
59.8 billion (TRY 189.6 billion). The company is currently rated Baa3 by Moody's and BBB- by Fitch.

EBRD Finance Summary

EUR 50,000,000.00

EUR 50 million investment in publicly traded bonds.

Total Project Cost

EUR 500,000,000.00

EUR 500 million

Environmental and Social Summary

Categorised FI. Vakifbank will be required to comply with EBRD's Performance Requirements, 2, 4 and 9, adopt and implement the EBRD's E&S Risk Management Procedures for SME and Micro Loans and submit Annual Environmental and Social Reports to the Bank.

Technical Cooperation

Under the "Finance and Advice for Women in Business" programme, the EBRD's investment will be supported by a comprehensive Technical Cooperation (TC) programme focusing on institutional capacity building, product development and marketing and outreach activities to build Vakifbank's capacity to reach out to women-led SMEs. The TC will be funded jointly by the EU's Instrument for Pre-Accession Assistance and the Turkish Ministry of Labour and Social Security.

Company Contact Information

Mr. Mustafa Turan, Senior Vice President
Mustafa.TURAN@vakifbank.com.tr
+90 212 316 7500
+90 212 316 7126
http://www.vakifbank.com.tr/
Camlik Caddesi, Cayir Cimen Sok. No:2 Floor:6 1.Levent 34330, Istanbul, Turkey
 

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