EBRD backs Turkish Lira-denominated debut bond issued by Turkish retailer Migros

ISTANBUL

The European Bank for Reconstruction and Development (EBRD) has said it is investing 30 million Turkish Liras in 150 million liras of the lira-denominated bond issued by the country’s second-largest retailer, Migros, in a bid to encourage local currency financing.

It is the first time the company is tapping debt capital markets, the EBRD said in a statement on July 18.

The issuance, arranged by İş Investment, will be listed on Borsa Istanbul and the proceeds will refinance short-term loans, it added.

“The Bank’s investment comes at a time of high volatility in the lira, when the right financing mix, including local currency financing, is critical for Turkish companies. It also reinforces the EBRD’s commitment to developing and deepening local currency and local capital markets,” the EBRD said.

Migros operates in 81 Turkish provinces, through a network of 1,976 food retail stores under Migros, M-Jet, 5M, and Macrocenter banners. The company is also active in Kazakhstan and FYR Macedonia with 41 Ramstore outlets.

Listed on Borsa Istanbul, 50 percent of the company is owned by Anadolu Group, a diversified fast-moving consumer goods group and a longstanding partner of the EBRD. Of the remaining shares, 23 percent belongs to private equity group BC Partners and 27 percent is held by free float investors.

The transaction marks the EBRD’s first financing of Migros in Turkey, having previously financed the retailer’s operations in Kazakhstan, according to the statement.