Sabiha Gokcen International, operator of Istanbul’s second airport, hired banks to manage a bond sale of as much as 500 million euros ($655 million) to international investors, two people familiar with the plan said.
The sale, to be held in March or April, will be marketed to investors based on financial results of the company ending last December, one of the people said. Unicredit SpA (UCG), Royal Bank of Scotland Plc and Bank of America Merrill Lynch (BAC:US) were hired to manage the sale, the person said.
Sabiha Gokcen is the first Turkish company to announce an international bond sale this year as prices fall and investors speculate the country may get a second investment-grade rating following the upgrade by Fitch Ratings on Nov. 5. Yields on Turkish corporate debt averaged 4.2 percent as of today, down from 6.9 percent a year ago and below the emerging-market average of 4.6 percent, according to JPMorgan Chase & Co. indexes.
“We would expect primary issuance to continue with the corporates in 2013, taking full advantage of pricing for an investment-grade bond,” London-based UBS AG analysts Kathleen Middlemiss and Tatiana Boroditskaya wrote in an e-mailed research note on the Turkish corporate bond market on Dec. 12. “There is a case to be had for Turkish bonds.”
Beermaker Anadolu Efes (AEFES) Biracilik & Malt Sanayii AS sold Turkey’s first non-junk corporate bonds in October. The same month, oil refiner Tupras Turkiye Petrol Rafinerileri AS (TUPRS) borrowed $700 million in a debut offering of bonds due in May 2018.
Sabiha Gokcen has held meetings with credit rating agencies to get a rating ahead of the bond sale, the people familiar with the situation said. Proceeds from the sale will be used to refinance outstanding debt, they said, and the bonds may be in euros or dollars equivalent to 500 million euros, one of them said.
The airport operator got approval from Turkey’s capital markets board on Nov. 13 to sell the bonds. The company is owned by GMR Infrastructure Ltd. (GMRI), Limak Holding AS and Malaysia Airports Holding Bhd. (MAHB)
Gokhan Bugday, chief executive officer of Sabiha Gokcen International, didn’t reply to phone calls seeking comment today. Silvia Lamberti, a spokeswoman for Unicredit, declined to comment.
The airport, located on the Asian side of Istanbul, increased the number of passengers served in 2012 by 10 percent to 14.5 million, or about 11 percent of total air passengers that used airports in Turkey excluding transits, according to State Airports Authority DHMI’s website.
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