Kuveyt Türk broke new ground in the field of sukuk by issuing Global Sustainable Tier 2 Sukuk for the first time in Turkey and in the world.
Kuveyt Türk’s sustainable sukuk issuance has a 10-year maturity of $350 million and an early redemption option at the end of the fifth year.
The financial institution has received more than $4.3 billion in demand from more than 150 investor institutions with a wide geographical distribution, including Continental Europe, the UK, the US, Asia and the Gulf.
And thanks to the intense interest of investors, the issuance was oversubscribed by 12 times and achieved the lowest pricing for any Tier-II issuance out of Turkey since 2017 at 6.125 per cent.
In fact, 20pc of the distribution was made entirely to green and social fund investors and according to bank director Cetin Yurttaser, the main point that distinguishes the transaction from other sukuk issuances of Kuveyt Türk and the market is that it has an Environmental-Social-Governance (ESG) structure.
Mr Yurttaser
“The funds obtained from the certificates will be transferred to Kuveyt Türk’s green and social projects throughout the term of the sukuk,” he explained.
“Relevant projects will be selected in accordance with Islamic finance principles, as well as Kuveyt Türk’s Sustainable Finance Scope Document and the second-party opinion received from a global environmental consultancy firm.
“Sustainable sukuk issuance with ESG structure also demonstrates the support of Kuveyt Türk, which has a strong SME portfolio and is also one of the sector leaders in renewable energy funding, for both green and social funding.”
In addition to sustainability, Kuveyt Türk will increase its already strong consolidated capital adequacy ratio by 389 basis points, with the sukuk issued in subordinated format.
&uuid=(email))