The European Bank for Reconstruction and Development (EBRD) subscribed to $40 million in a $250 million bond issue by Yasar Holding, a Turkish agribusiness focused on livestock and fisheries production, as well as consumer foods and agricultural inputs.
The 2020 bond, which is listed on the Luxembourg Stock Exchange, was issued to refinance Yasar’s existing bond issue. It pays a 8.875 percent coupon, some 0.75 percent percent less than the 2015 bond issued in 2010.
The bond was oversubscribed by $370 million and was considered a good test of demand for high-yield emerging market bonds. It is hoped other Turkish agribusinesses will consider bond issuances as a source of financing.
“The successful placement of Yasar Holding’s Eurobond will help the company to further diversify its funding base and will encourage other corporates in Turkey to pursue similar ways of financing” said Michael Davey, EBRD director for Turkey. “Yasar is an excellent example of a strong Turkish agribusiness company and that has been reflected in the very positive response from the market to this issuance.”
Turkey has struggled to attract capital in recent months amid geopolitical and economic tensions in the region and one investment firm delayed fundraising to wait for appetite to return. Agriculture employs about 20 percent of the workforce so is an important sector for the country.
The refinancing will support the company’s plans to open a new dairy production facility in Sanliurfa, in southeast Turkey. The company will provide training to local dairy producers, veterinary services to livestock farmers and will be selling the company’s brand of animal feed in the area.
The bond was given a B2 and B rating respectively by rating agencies, Moody’s and Fitch. Barclays Capital and Citigroup were the bookrunners. Yasar held roadshows for the bond in the UK and the US.