Istanbul Municipality sells $715mn five-year green eurobond at 10.50% coupon

By Akin Nazli in Belgrade December 2, 2023

Istanbul Metropolitan Municipality (IBB) has sold $715mn of green eurobonds (XS2730249997) due 2028 at a coupon rate of 10.50% (priced at 100), the municipality said on November 30.

Bank of America (New York/BAC), Emirates NBD Capital Limited, ING Bank (Amsterdam/INGA), JPMorgan (New York/JPM) and Societe Generale (Paris/GLE) acted as intermediaries in the deal.

The proceeds from the deal will be used to finance clean transportation investments, including metro line constructions, and procuring fully electric or zero-emission vehicles for public transportation.

Istanbul Municipality currently has a total of nine metro line projects under construction.

The municipality has three outstanding eurobonds. In ratings, it has a B/Stable (in line with Turkey’s sovereign rating and five notches below investment grade) from Fitch Ratings and a B3/Stable (six notches below investment grade in line with Turkey’s sovereign rating) from Moody’s Investors Service.

Istanbul Municipality's outstanding eurobonds
Issuer ISIN Coupon Volume (mn) Issuance Maturity
Istanbul Municipality (IBB) XS2010029234 6.375% $580 Dec 1, 2020 Dec 9, 2025
Istanbul Municipality (IBB) XS2468421248 10.75% $305 Apr 5, 2022 Apr 12, 2027
Istanbul Municipality (IBB) XS2730249997 10.50% 715 Nov 29, 2023 Dec 6, 2028

 

 

 

 

 

 

 

Table: Istanbul Municipality outstanding eurobonds.

 


Istanbul Municipality’s external debt stock stood at $3bn at end-June.

 

Istanbul hosts a population of 16mn officially registered residents, but the real population is thought to be above 20mn.

 

About 95% of Istanbul's total debt is in foreign currency and unhedged, exposing it to significant FX risk and therefore an increase in its total debt on significant FX volatility.

 

In May, the municipality obtained a €150mn six-year loan with a grace period of two years from ING Bank (Amsterdam/INGA).

 

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