Garanti BBVA issues $500 million Tier 2 subordinated debt, with record demand from investors
BBVA’s Turkish unit has successfully issued a $500 million 10-year bond, with a coupon rate of 8.375 percent. The 10-year Tier 2 subordinated debt has a call option on the fifth year.
Garanti BBVA, which is back in the market for the first time since 2017, received more than 8 times demand from 283 unique investors. This deal became the most cost-effective “sub-debt issuance” made by a bank in recent years, with its pricing corresponding to ‘US Treasury + 409 bps’, ‘Turkish eurobond + 110 bps’ or ‘Turkish eurobond x 1.15 multiplier’. Book orders were the highest since 2014.
The bank’s CEO Recep Baştuğ said that Garanti BBVA continues its ambition of being the first bank that international banks and investors want to partner with in Türkiye. The issue, which complies with Basel III subordinated bond requirements, underlines the bank's expertise in financial investments and its strength in international banking relations. “We are happy to have successfully completed the issuance of $500 million in subordinated bonds and received outstanding interest from international investors,” he added.
For Bastug, the high demand for the transaction is an important indicator of the trust in Türkiye and Garanti BBVA. “We believe that with this transaction, we have paved the way for other institutions and organizations in our country to borrow with better conditions. The transaction also contributes to the development and deepening of capital markets. We will continue to support our country via external funding opportunities with our reputation in international markets and strong financial structure,” he concluded.