EBRD backs electricity firm’s first Turkish Lira-denominated bond

The European Bank for Reconstruction and Development (EBRD) stated on Dec. 6 that it is supporting the debut bond issuance by Zorlu Osmangazi, a subsidiary of Zorlu Energy and part of the Turkish conglomerate Zorlu Holding, in a new 70 million-Turkish Lira (15 million euro) capital markets transaction.

Zorlu Osmangazi carries out electricity distribution and sales services in five Turkish provinces: Eskişehir, Kütahya, Afyon, Uşak and Bilecik.

Through its subsidiaries Osmangazi Electricity Distribution (OEDAS) and Osmangazi Electricity Retail Sales (OEPSAS), the company serves more than 2.5 million people.

Zorlu Osmangazi is tapping capital markets to partly finance its four-year investment program, which includes replacement, upgrade and expansion of its network to meet growing demand in a key industrial region.

The EBRD has invested in the three-year 140 million lira tranche of the bond which uses TRLIBOR, the Turkish Lira Interbank Offered Rate, as its benchmark rate, according to the statement.

The total amount issued by the company, including the shorter-tenor 1.5-year tranche, was 175 million liras, read the statement.

The bonds will be listed on Borsa Istanbul, Turkey’s sole stock exchange, it added.

The transaction is part of the EBRD’s efforts to promote corporate bonds denominated in the lira as financial instruments for companies whose costs and revenues are in local currency. These help them avoid foreign exchange risk as they raise finance.

The cooperation between the EBRD and Zorlu Holding dates back to 2009, when the EBRD first started investing in Turkey.