Financial Times: Sberbank Eurolira Bond Strengthens Turkish Ties
OREANDA-NEWS. March 06, 2013. After buying a bank in Turkey last year it was a logical step for Sberbank to start borrowing in the Turkish currency.
The Russian state savings bank raised 550m Turkish lira (USD 304m) in an inaugural lira-denominated eurobond this week and said it would use the proceeds to support the operations of its Denizbank Turkish subsidiary.
Sberbank placed the five year “eurolira” bond at 7.3 per cent, slightly below the 7.5 per cent price guidance for the issue that was executed on Monday after a one-day roadshow.
Sberbank’s inaugural eurolira bond offering was a “unique deal which combined Sberbank’s outstanding credit quality as an international group with its strong position in Turkey thus allowing for direct exposure to TRY positions in Turkey,” said Vlada Gosal, managing director for debt capital markets at Sberbank CIB.
The Sberbank deal came on the back of the landmark eurolira bond issued by Akbank, Turkey’s third biggest bank by assets, late last month, the first ever transaction of its kind.
Akbank placed 1bn lira of five year eurobonds priced at 7.5 per cent in the first ever bond denominated in the Turkish currency issued in the international market.
Sberbank bought Denizbank from Belgium’s Dexia last year for USD 3.87bn, becoming the first Russian lender to buy a bank in Turkey. At the time Herman Gref, Sberbank chief executive, said Turkey would be the most attractive market in Europe over the coming 15 years.
Gosal said Sberbank would use the proceeds from the eurolira bond to help finance Denizbank’s operations in Turkey where consumers are on a borrowing spree.
The issue of bonds in Turkish lira will eliminate the need to convert dollar borrowing into local currency to serve domestic demand for loans.
Timothy Ash at Standard Bank said Sberbank’s debut eurolira bond was a statement that Russian banks are “here in Turkey and open to do business where foreign banks have been stepping back a bit”. Sberbank’s eurolira issue also underscores a growing trend among emerging market companies to diversify borrowing into the currencies of emerging market countries.
Sberbank raised USD 6bn in bonds in 2012 including USD 4.7bn worth of USD-denominated debt. Anton Karamzin, Sberbank’s chief financial officer, said the Russian bank planned to raise similar volumes in bonds this year, but would probably diversify away from the US dollar into other currencies including the Turkish lira.
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