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IFC Invests in Turkey’s First Covered Bonds to Support Capital Markets Development


In Istanbul:
Name: Basak Pamir Ulgen

Phone: +90 212 385 3075

E-mail:
BUlgen@ifc.org


Istanbul, Turkey, July 26, 2011—IFC, a member of the World Bank Group, is partnering with FMO, the development bank of the Netherlands, and UniCredit CIB London to support Turkey’s Sekerbank in its groundbreaking issuance of covered bonds which will support lending to small and medium enterprises.

Sekerbank is the first bank in Turkey to issue covered bonds under legislation enacted in 2009. IFC is investing up to $25 million equivalent in Turkish lira in the first covered bond issuance, alongside investments from UniCredit CIB London (EUR50 million equivalent), and FMO (EUR25 million equivalent). Covered bonds are debt securities backed by a pool of designated assets.

“Sekerbank is a key partner for IFC in addressing the financing needs of Turkish small and medium enterprises, which are crucial for economic development and job creation,” said Sybile Lazar, IFC Associate Director for Turkey. “The transaction demonstrates the significant role IFC can play in helping mobilize resources for long-term financing and in developing new asset classes that can contribute to the development of capital markets in Turkey.”


The first covered bond issuance in Turkey will launch this asset class in Turkey and serve as a model for replication in other countries in Europe, and the Middle East and North Africa. The groundbreaking transaction will help provide banks an alternative source of funding and will contribute to job creation and social development in Turkey as the recipients of covered bond financing will be primarily micro, small, and medium enterprises in rural and frontier regions of Turkey.


Covered bonds are a highly developed asset class in many advanced capital markets, with a volume outstanding of EUR2.5 trillion in 2010, largely concentrated in Denmark, Germany, France, and Spain. Sekerbank’s covered bond will be one of the first emerging market covered bonds to use micro, small, and medium enterprise loans as the asset pool.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org

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