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| Anadolu Efes | |
| Size | $500 million 10-year bond issue |
| Bookrunners | Bank of America Merrill Lynch, HSBC, JPMorgan, RBS |
| return to the Emerging Europe Deals of the Year index | |
Establishing a reputation in the global debt markets was also a priority for Anadolu Efes, the Turkish beverage group that made its dollar debut in October to a rapturous reception from investors. “As a global company that is growing quite fast, we wanted to devise a funding source that would allow us to extend our maturities and diversify our investor base, and that we can tap into in the future when and if we have sizeable financing requirements,” says Can Çaka, the group’s chief financial officer.
Unlike with Brunswick Rail, the success of Efes’s inaugural deal was never seriously in doubt. Even before the start of the four-day roadshow, the issue was multiple times oversubscribed as investors queued up to buy into a company that boasts Turkey’s only double investment-grade corporate rating and had in March franked its global ambitions with the takeover of the Russian and Ukrainian subsidiaries of SABMiller, making it the second-largest player in Russia’s beer market.
Few, however, could have predicted that the $500 million 10-year deal – the first ever in the maturity from a Turkish corporate – would achieve a final book of $4.5 billion despite pricing 15bp through the tightly traded Turkish sovereign. That it did was largely attributable to timing, partly fortuitous – the deal priced at what turned out to be the peak of a record-breaking quarter – and partly the result of concerted efforts from both borrower and leads to ensure that the company made it to market ahead of fellow Turkish debutant Tupras.
As a result, investors looked primarily to Efes’s global beverage peers for price guidance rather than benchmarking against a lower-rated Turkish name. “We always understood the first-mover advantage in terms of being the first blue-chip corporate to come out of Turkey, so all parties worked hard to accelerate the process to achieve that window,” says Gaurav Arora, a director in CEEMEA debt origination at RBS.
In turn, the ultra-tight pricing achieved by Efes has sparked a fundamental change in Turkish companies’ attitudes to funding, according to Olcay Yagci, head of Southern CEEMEA DCM and financing at Bank of America Merrill Lynch. “The fact that Efes’s issue priced through the sovereign and was massively oversubscribed will be forgotten in six months’ time, but the fact that it transformed the Turkish debt capital markets will be remembered for years to come,” he says.
Indeed, says Çaka, opening up the global bond market to Turkish corporates was a key driver for Efes itself – as the company’s code name for the deal, North Star, implies. “We are very happy to see that more borrowers are considering tapping the market,” he says. “If investors can see that there are plenty of strong Turkish names out there it will help develop the market and ensure a solid funding base for the sector.”
