Development and Investment Bank of Türkiye Completes Its First Sukuk Issuance Advisory Transaction with Tarım Kredi Holding
Accelerating its work in investment banking and advisory services, Development and Investment Bank of Türkiye completed its first sukuk issuance advisory transaction with Tarım Kredi Holding within the scope of its capital-markets advisory activities.
Öztop: “We Stand Out Through Our Financial Advisory Expertise”
TKYB CEO İbrahim Öztop emphasised that the Bank had acted as intermediary for its first sukuk issuance within the scope of its capital-markets advisory activities and stated that it continued working towards its objective of becoming an active player in investment banking. Öztop said: “In addition to our asset-backed securities issuances, we serve as financial adviser in relation to organising horse races and accepting wagers on horse races held in Türkiye and abroad under the licences owned by Türkiye Wealth Fund. We also act as financial adviser on the Türkiye Wealth Fund project to consolidate insurance companies controlled by public banks under the Türkiye Wealth Fund.”
Öztop stated that the Bank would continue working in 2020 to enable its customers, particularly real-sector companies, to raise financing through capital markets.
Poyraz: “We Are Diversifying Our Financing Opportunities”
Dr Fahrettin Poyraz, Chair of the Board of Directors of Tarım Kredi Holding, said: “Türkiye Agricultural Credit Cooperatives, Türkiye’s largest family of farmers, provides agricultural inputs to farmers at affordable prices while also assuming responsibility for delivering products to consumers. In this model, which acts as a bridge between producers and consumers, financing resources form a critically important link. The long-term financing provided to our company TARKİM Bitki Koruma A.Ş. through a sukuk issuance intermediated by Development and Investment Bank of Türkiye is an important step in diversifying our financing opportunities. Under increasingly competitive market conditions, introducing new financing models to the sector and reducing sector costs are critical to ensuring sustainability in agriculture. Under the leadership of Tarım Kredi Holding, we will continue assessing different financing alternatives—particularly capital-markets issuances—that can contribute to the agricultural value chain.”
TARKİM Prepares for a New Investment
Dr Ahmet Bağcı, General Manager and Board Member of Tarım Kredi Holding, said: “Under the coordination of Tarım Kredi Holding and within the strategic priorities of the subsidiaries of Türkiye Agricultural Credit Cooperatives, we prioritise investments by companies that provide agricultural inputs to our producers. The crop-protection sector and TARKİM are among the most critical areas and companies for us, and we expect to complete the feasibility studies for a new investment in the near term.”
Tevfik Akıncı, Head of Finance at Tarım Kredi Holding, stated that, since 2019, the Holding had begun using numerous new instruments within the scope of strategic financing work for the companies under its coordination. Akıncı said: “We will continue diversifying all forms of external funding and plan to carry out capital-markets issuances for our other companies in the near future.”
Sukuk Benefits Both Companies and Investors
Sukuk are securities issued as a financing instrument for governments and companies that offer investors a return compatible with interest-free finance. Depending on need, issuances may be structured in various forms provided for under legislation or as hybrids of those forms. Issued by asset leasing companies, sukuk—also known as lease certificates—are securities compliant with the principles of interest-free finance and entitle investors to a share of the income generated by the relevant asset or right in proportion to their holdings. They provide benefits to both companies and investors.
In TARKİM Bitki Koruma’s management-agreement-based lease-certificate transaction, a portfolio of assets and rights underlying the sukuk issuance is created without transferring ownership of the originating entity’s assets or rights. During the term of the issuance, the portfolio comprising those assets and rights is managed by the Fund User for and on behalf of sukuk investors under agreements signed between the asset leasing company and the Fund User. Income generated from the portfolio is transferred to the asset leasing company at maturity in accordance with the contractual provisions. At maturity, return payments and principal are paid to investors through the asset leasing company, completing the transaction.
| Issue Details | |
| Financial Adviser and Intermediary | Development and Investment Bank of Türkiye A.Ş. |
| Fund User | TARKİM Bitki Koruma Sanayi ve Ticaret A.Ş. |
| Asset Leasing Company (Legal Issuer) | ZKB Varlık Kiralama A.Ş. |
| Sales Agent | Ziraat Yatırım Menkul Değerler A.Ş. |
About Development and Investment Bank of Türkiye
Since 1975, Development and Investment Bank of Türkiye has supported development initiatives in every area needed by Türkiye. Drawing on its strong international standing and the resources it secures, it supports competitive and efficient production for a stable and robust economy. In line with the 2023 objectives, guided by the 11th Development Plan and the United Nations Sustainable Development Goals, the Bank focuses on financing sustainable development. With experienced and specialised human resources possessing command of global banking standards, a dynamic structure, and innovative products and services, it will continue to stand by investors.
www.kalkinma.com.tr
About Türkiye Agricultural Credit Cooperatives
The foundations of Türkiye Agricultural Credit Cooperatives were laid in 1863 with the Homeland Funds. The organisation assumed its present structure in 1972 with the establishment of the Central Union under Law No. 1581 on Agricultural Credit Cooperatives. It was conceived as an organisation based on mutual assistance and solidarity. Today, with 17 regional unions, 1,625 cooperatives, 197 service offices, 15 companies and total assets of TRY 35 billion, Türkiye Agricultural Credit Cooperatives is a large family with the capacity to reach not only its 850,000 members but also 80 million people through its role in food supply.
www.tarimkredi.org.tr
About Tarım Kredi Holding
In 2018, the Central Union of Türkiye Agricultural Credit Cooperatives brought together its companies operating across numerous sectors under Tarım Kredi Holding, adopting a more professional management approach and committing itself to meeting the needs of the agricultural sector and agricultural cooperatives more rapidly, efficiently and effectively. Tarım Kredi Holding’s subsidiaries procure inputs and technological products for agricultural production and undertake the marketing and sale of agricultural products. To perform these functions, the group has domestic and international investments in areas including seeds, livestock, plant nutrition, compound animal feed, crop protection through TARKİM, plastics, irrigation and drip-irrigation systems, insurance, information technologies, logistics, food, foreign trade and licensed warehousing. Within this framework, Tarım Kredi Holding’s principal purpose is to meet the financing needs of the group companies of Türkiye Agricultural Credit Cooperatives through a single structure and determine their fundamental management and investment strategies.