Page 18 - bne IntelliNews monthly magazine December 2023

18 I Companies & Markets bne December 2023
bne:Bond
Turkey’s Mersin Port sells $600mn of five-year eurobonds at 8.25% coupon
Akin Nazli in Belgrade
Turkey's port operator Mersin Uluslararasi Liman Isletmeciligi (Mersin Port/MIP) has sold $600mn of eurobonds (US590454AC80) due 2028 at a coupon rate of 8.25% and a yield to investor of 8.50% (priced at 98.999), Reuters reported on November 9.
The paper is callable at the end of the second year. The company has not issued an official statement on the deal as yet.
Citibank (Citigroup/New York/C), DBS Bank (Singapore/D05) and HSBC (London/HSBA) acted as bookbuilders for the deal.
In July, MIP said that it was closely monitoring opportunities to refinance its $600mn of outstanding five-year eurobonds (XS2071397850) due November 2024, callable at par in November 2023.
In 2013, MIP sold the $450mn of seven-year eurobonds (XS0957598070) in question at a coupon rate of 5.875%.
At issuance, the paper was provisionally rated investment grade by both Moody’s Investors Service (Baa3) and Fitch Ratings (BBB-).
It was recorded as Turkey’s first ever infrastructure bond issue. The European Bank for Reconstruction and Development (EBRD) bought $80mn of the paper.
In 2019, to roll the existing $450mn paper, MIP sold $600mn worth of five-year eurobonds (XS2071397850) at a coupon rate of 5.375%. The EBRD acquired $90mn of the paper.
In 2013, the World Bank Group’s International Finance Corporation (IFC) provided $75mn for MIP’s East Mediterranean Hub Project by acquiring eurobonds issued by the company.
In 2019, the IFC participated in the rollover of the paper by acquiring $80mn of new eurobonds.
In July, the EBRD said that it was in September set to approve
a loan worth up to $50mn for the company, while the IFC said that it would also provide a loan worth up to $50mn to the MIP.
The loans will be used to finance the second phase of the construction of the East Mediterranean Hub Project.
The $408mn project was launched in 2013. Its first phase was completed in 2016. The second phase of the project
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aims to increase the port's container handling capacity to 3.6mn twenty-foot equivalent units (TEU) from the current 2.6mn TEU.
The plan is to commence construction works by 4Q23. The berth and new cruise terminal are expected to become operational by end-2025.
In 2022, the port handled 2.02mn TEU of containers, down 4% y/y. Revenues rose by 10% y/y to $353mn.
“It was recorded as Turkey’s first ever infrastructure bond issue”
MIP currently has a B/Stable credit rating from Fitch Ratings, five notches below investment grade and in line with Turkey’s sovereign ratings.
MIP is a JV that operates the Mersin Port under a 36-year concession agreement signed in 2007 with the Turkish Privatisation Administration and Turkish State Railways.
Mersin Port, launched in 1962, is located on Turkey’s Mediterranean coast. It is Turkey's largest port in terms of total container throughput.
Anchor symbol marks the location of Turkey's Port of Mersin. / Open Street Map Foundation, cc-by-2.0