TURKEY —IFC, the largest global development institution focused on the private sector in emerging markets, has invested $80 million in the $600-million bond issued by Mersin International Port (MIP).
MIP is the largest port operator in Turkey, serving 75 percent of export and import flows in southern, central, and eastern Turkey and majority owned by PSA Global, a global partner of IFC.
As anchor investor, IFC helped MIP successfully complete the issuance with a credit rating higher than that of the sovereign rating.
The IFC investment aims to help sustain critical transport infrastructure, as well as build a more resilient financial system by deepening capital markets to diversify sources of long-term financing for Turkish companies.
The bond’s proceeds will be used to refinance MIP’s existing $450 million Eurobond—issued in 2013 and maturing in August 2020—and for essential corporate expenditure.
The refinancing will help MIP sustain its high-quality port services, contributing to Turkey’s economic growth.
Also, this will allow the company to launch its capital expenditure program planned for the next five years, aimed at addressing growing container traffic and the shipping industry’s move towards bigger vessels and demand for better services.
The 2013 bond, also supported by IFC, was the first infrastructure project bond issued in Turkey, opening up a new asset class in the country.
The new bond issuance also preserves the progress achieved to date in opening and establishing Turkey’s debt capital markets for corporate infrastructure issuers and project bonds.
The bond’s success sends positive signals of the deepening of debt capital markets for infrastructure as an asset class, which remains relatively new and not well-understood.
The bond received a high level of investor interest despite the challenging market environment in Turkey.
Arnaud Dupoizat, IFC’s Country Manager for Turkey said, “IFC’s investment in the MIP bond is an important demonstration of IFC’s strategy in Turkey, as it focuses on increasing Turkey’s competitiveness and connectivity through improvements in critical transport infrastructure that facilitates export-oriented growth and greater presence in global value chains”.
IFC – a sister organization of the World Bank and member of the World Bank Group – is a leading port financier in emerging markets, having financed almost 70 port investments around the world.