Latham & Watkins Advises on Turkey's First Ever Infrastructure Bond

Deal may encourage more Turkish companies to look to capital markets for funding infrastructure projects.

August 18, 2013

Latham & Watkins advised the issuer, Mersin International Port (MIP), a joint venture between Turkey’s Akfen Holding and Singapore’s PSA International, in connection with Turkey’s first ever infrastructure bond. The US$450 million bond issuance closed on 12 August 2013. The seven year bonds, which are listed on the Irish Stock Exchange and rated investment grade by both Moody's (Baa3) and Fitch (BBB-), priced at 99.576% for a coupon of 5.875%.

MIP has a 30 year concession to operate Turkey’s largest port in terms of total throughput. The proceeds of the bonds are being used to refinance MIP’s project finance debt as well as to finance additional capital expenditure requirements.

The deal team included London project finance partner Ayesha Waheed, corporate partners Olof Clausson and Lene Malthasen, finance partner Reena Gogna and corporate counsel Markus Bauman, together with support from corporate associates James Baxter, Ekin Akar and Theo Kalic, and finance associate Andrea Hutchinson. 

“This is a unique transaction which we hope will serve as a blueprint for other Turkish companies that are considering financing options for energy or infrastructure projects,” Waheed said. “The bonds’ unsecured nature and incurrence-based covenants makes them closer to a high yield financing rather than a project bond, which will be very attractive to projects with a strong performance record. We believe that this financing will encourage other Turkish companies to look to the capital markets as a much needed source of funding for energy and infrastructure projects.”

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