White & Case Advises on the First Turkish Covered Bond
Global law firm White & Case LLP advised UniCredit Bank AG, London Branch, as arranger on a new €335 million Turkish covered bond programme for Şekerbank TAŞ and initial issuances thereunder—the first-ever covered bond programme in the Turkish market. Known as the Şekerbank Asset-Guaranteed Bonds, the covered bond is also the first to earn an "A3" rating from Moody's Investors Service.
"The transaction represents many significant firsts within the Turkish bond market, as it is not only the first Turkish covered bond ever issued, but it is also the first-ever structured finance deal in Turkey backed by existing balance sheet assets and globally the first covered bond backed by SME receivables," said David Barwise, partner at White & Case. "This complex and innovative deal continues to reinforce White & Case's leading position in emerging markets advisory, and as Turkey's market continues to grow, we hope to see an increase in these types of issues."
"It has been a pleasure working with White & Case on this unique transaction," said Wasif Kazi, Director, Structured Capital Markets, UniCredit Bank AG, London Branch. "On every occasion, they demonstrated a pro-active commitment to driving the transaction forward."
The Şekerbank Asset-Guaranteed Bonds are being issued by Şekerbank TAŞ, a leading Turkish bank in the SME sector, and will constitute senior full recourse obligations of Şekerbank and be secured by an asset pool of granular short-dated SME loans ring-fenced for the benefit of bondholders. The Programme is the first transaction under Turkey's Capital Markets Law and the Communiqué on Asset-Guaranteed Securities. For the first time in covered bond history, this programme combines strict structured finance technology based on the control and assessment of the asset pool cash flows and triggers leading to a pass-through structure and liquidity protector within a covered bond legal framework and statutory supervisor, creating a cash flow covered bond with senior recourse to Şeberbank TAŞ. The asset pool has a weighted-average life shorter than the weighted-average life of the covered bonds mitigating refinance risk, which is another first of its kind and is unique in a covered bond transaction. The programme size is expected to be more than €250 million equivalent by the end of September 2011. Final registration of the programme and initial issuances is expected in the next two weeks.
The White & Case team was lead by Singapore-based partner David Barwise and assisted by Istanbul local partner Guniz Gokce and associates Ronan Mellon and Ranjit Golar (London), and Ceren Sen (Istanbul).
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