Akbank has become the first deposit bank in the Turkish banking sector to issue sustainable subordinated debt. The yield and coupon rate of the US $500 million transaction, which has a maturity of 10 years and a call option at the end of 5 years, came at 6.80%. The bank's subordinated debt (Tier 2) issuance received subscriptions around US $1.4 billion with an oversubscription rate of nearly three times the issuance, from more than 150 foreign investors.
“We are one of the strongest banks in Turkey with our current capital adequacy ratio”
Commenting on the first sustainable subordinated debt that Akbank has issued, Akbank CEO Hakan Binbaşgil said, “We are one of the strongest banks in Turkey with our current capital adequacy ratio. Following the completion of the issuance, we expect the transaction to have a positive impact of 105 basis points on our bank's capital adequacy ratio, which is already high by international standards”
“We will use the proceeds of the issuance to finance projects that will support our country's transition to a low-carbon economy”
“With our expertise in wholesale funding, successful borrowing strategies and exemplary sustainability practices, more than 150 investors, including international mutual funds and private banks, showed interest in this transaction. Our subordinated debt issuance, - carried out in a period of high volatility in the markets - attracted a demand of approximately US $1.4 billion. Thanks to the strong interest from investors, the coupon rate was set at 6.80 percent. . Referring to the regional breakdown of the investors, we see that 35% are from the United Kingdom, 30% from the United States (Americas), 30% from Europe and the remaining 5% from the Middle East and Asia. In addition, 39% of total investors consist of ESG (sustainable debt instruments focused) investors. We will use the proceeds of the issuance to finance projects that will support our country's transition to a low-carbon economy. We are proud to sign such a successful transaction”
“We will continue to take responsibility and action for a more sustainable world”
“We prioritize sustainability-linked foreign borrowing transactions. In August 2020, we completed our bank's first Green Bond transaction of US $50 million. In April this year, we provided more than US $675 million in support to the Turkish economy with our bank's first sustainability- linked syndication loan. With this last issuance of US $500 million, we concluded the first sustainable subordinated debt issuance among the deposit banks of the Turkish banking sector. With exemplary transactions in our sector, we further elevated our bank’s sustainability- linked funding. As Akbank, we will continue to take responsibility and action for a more sustainable world while continuing to provide support the economy.”