Istanbul Metropolitan Municipality (IMM) has issued a $580 million senior unsecured bond to finance 4 metro line projects. Issued with a five-year maturity, the bonds are priced with a final yield of 6.60% and have a coupon of 6.375%. The deal was completed following 2 days of conference calls with global investors and attracted a $2.5 billion of orders.
The transaction breaks new ground as it marks the first-ever local government issuance out of Turkey in 30 years, the largest USD deal achieved by a city from the Central and Eastern Europe Middle East and Africa (CEEMEA) region, and the first municipal issuance out of CEEMEA since 2013.
The proceeds of the transaction will be used to finance the following metro lines in Istanbul:
Kaynarca – Pendik – Tuzla
Çekmeköy – Sancaktepe – Sultanbeyli
Kirazlı – Halkalı
Mahmutbey – Bahçeşehir – Esenyurt
In a move to ease the city’s traffic congestion problem, the new metro lines will introduce 39 new stations and an additional 52.1 kilometers to Istanbul’s metro railway system, while serving 275,000 passengers hourly.
Speaking on the matter, Istanbul Mayor Ekrem İmamoğlu said: “The high level of interest shown by investors to the bonds issued by the IMM is a product of the widespread trust in Istanbul’s new administration. The reliable investment climate created by the IMM’s commitment to the principles of transparency, merit and collective thinking is what kept the coupon interest at the minimum rate of %6,375.”
The diligent efforts of Deputy Secretary-General Mr. Turgut Tuncay Önbilgin and his team were central in the run-up to the IMM’s historic Eurobond deal. The Deputy Secretary-General said: “Winning over international investors is possible only through a climate of trust. We were able to convince the investors, who had previously distanced themselves from Turkey, of Istanbul’s strength, reliability and cooperativeness.”
