TSKB issued its third and this year’s first Sustainable Eurobond out of Türkiye

8 January 2021
- 5 min Read

Providing innovative ESG products and services, TSKB issued its third Sustainable Eurobond worth of USD 350 million with a maturity of 5 years. The issuance was 6 times oversubscribed. Funds secured will be lent to finance projects that comply with TSKB's Sustainable Financing Framework. TSKB CEO, Ece Börü, stated that they were proud and pleased contributing to the country's sustainable investments with this issuance as well.

The Industrial Development Bank of Türkiye (TSKB), who has established long-lasting relationship with Development Finance Institutions has been pursuing a sustainable banking model since its foundation in 1950. The Bank has been supporting investments in transition to a low-carbon economy for the last three decades. TSKB issued the first Green/Sustainable Bond in Türkiye and out of the CEEMEA region in 2016, which was followed by the first Subordinated Sustainable Bond issuance in the world the year after. TSKB continues this journey with a new sustainable bond. The Bank commenced 2021 with a sustainable bond issuance worth of USD 350 million with a maturity of 5 years. The issuance was coordinated by Bank ABC, BNP Paribas, Citi, Commerzbank, ING, SMBC Nikko and Standard Chartered Bank. The issuance also marks the first eurobond issuance of the year out of Türkiye.

Delivering its banking operations in line with globally recognized sustainability principles and acting on a mission to make a substantial contribution to the UN Sustainable Development Goals through the financing facilities it offers, TSKB's most recent sustainable bond issuance was 6 times oversubscribed by investors. With a price improvement of over 50 bps compared to the initial book-building, the deal was closed with zero new issue premium and significantly subscribed by green and sustainable funds. The proceeds of the issuance will be used to refinance the existing applicable portfolio and finance new projects eligible under TSKB's Sustainability Framework.

TSKB CEO Ece Börü was quoted that they were very pleased to complete the first eurobond issuance of 2021 in the Turkish financial sector with a sustainability angle involved. “At TSKB, we continue to enhance our target to integrate contemporary sustainability principles into our entire banking model. Four years ago, we had the privilege of issuing the first green and sustainable bond out of our country and the wider CEEMEA region. Soon after, we proudly issued the first subordinated sustainable bond in the world. We have recently been witnessing the increasing importance of climate change risks and the acceleration in the need for sustainable investments especially during the pandemic. In such a period, we are truly happy on behalf of our country to start 2021 with a new sustainable bond issuance. We will create additional funds for environmental and social investments using the proceeds of this successful issuance, which was 6 times oversubscribed in the global market and attracted huge interest from green and sustainable funds."

Börü underlined that the key driver fueling such success was the environment and social impact evaluation in loan allocation process TSKB pursues since early 90s. “Today, 72 percent of TSKB's loan portfolio is composed of sustainable and social investments such as renewable energy, energy and resource efficiency, environment, climate and inclusiveness financing such as women's employment. We measure the environmental and social risks of all projects, regardless of the amount. We monitor the impact of our loan portfolio in terms of the UN Sustainable Development Goals through our SDG mapping methodology, and we enable our stakeholders to take concrete sustainability actions via our innovative loan models and experience exchange platforms. We have recently established the Green Swan, TSKB Climate Platform with all our stakeholders to raise awareness and find out solutions in the field of combating climate risks. We constantly engage with new initiatives in our effort to increase the social benefit we create in this journey. Today, we rank 6th Bank among 372 banks worldwide in terms of our Environmental Social and Governance (ESG) Risk Rating, and we lead the Turkish banks to that end. Each new success gives us hope for a sustainable future and yet puts a burden on our shoulders with a great responsibility required at the same time. We believe that we could use each single cooperation opportunity to the fullest to achieve significant results in mitigating the effects of climate change and ensuring inclusive development. With this opportunity, I would like to thank all financial institutions we worked for our Sustainable bond issuance and to all investors investing in our bond.”