The first direct high-yield offering to come out of Turkey has closed, avoiding the administrative burdens of the customary loan participation note (LPN) structure.
In November construction company Yuksel Insaat issued $200 million of high-yield notes directly instead of through an offshore bank which would loan back the proceeds.
Turkish issuers typically choose the LPN structure because it sidesteps the need to pay 10% withholding tax on interest payments. But changes to the capital markets regime, combined with the increased cost and complexities associated with intermediate issuers, meant a direct placement was preferred in this deal.
“It offers more certainty over tax...