DEAL: world’s first sustainable tier two bond

Author: Lizzie Meager | Published: 12 Apr 2017
The proceeds will be used for a range of projects including onshore wind farms
Turkish development bank Türkiye Sınai Kalkınma Bankası (TSKB) has issued the world’s first sustainable tier two bond, setting a new precedent in a relatively nascent market.

The $300 million resettable Reg S deal, listed on the Irish stock exchange, was issued to satisfy two of the development bank’s funding needs: regulatory tier two capital, and a continued commitment to sustainable projects.

According to Linklaters partner Richard O’Callaghan, who advised the issuer, in a legal sense the deal is the same form of instrument as a regular tier two bond from a Turkish bank. “Where it differs is in the context of the use of proceeds,” he added.

The proceeds will go towards a range of sustainable projects including onshore wind...