World's First Ever ESG Linked Syndicated Facility for a Bank Borrower!

With the participation of IFC and EBRD, our Bank has signed three separate loan agreements including a syndicated loan agreement  with 367-days maturity in the total funding amount of US$ 698,860,00.00 The all-in cost has been realized as Libor+2.25% and Euribor+2.00%.

Transaction overview:

  • In April 2020 Garanti BBVA (“Garanti”) mandated Bank of America (“BofA”) as Coordinator, Sole Sustainability Coordinator, Documentation Agent, Bookrunner and Mandated Lead Arranger to arrange the refinancing of Garanti’s existing bank facilities and incorporate an ESG linked pricing mechanism. Standard Chartered bank also acted in capacity of joint coordinator in the transaction.
  • The new facilities are ESG-Linked loans demonstrating both Garanti’s and the lenders’ commitment to sustainable and responsible business. Garanti is targeting a materially increased share of renewable energy use in the bank’s business and offices, as well as a commitment not to originate financing for any greenfield coal-fired power plants.
  • The refinancing was successfully navigated by the Company despite a volatile market backdrop and weakening macroeconomic environment as a result of the ongoing COVID-19 pandemic.
  • The facility attracted commitments from 28 banks across 13 countries. The facility includes Garanti’s core relationship banks as well as first time lenders, highlighting Garanti’s intrinsic financial strength and continued strong performance, as well as its solid banking relationships.


Garanti BBVA CEO Recep Baştuğ
giving information in respect said, “We are experiencing the pride of signing loan facility agreement totaling 700 million of US Dollars by successfully completing the syndication process in a period when the financial markets are so much challenged because of Coronavirus pandemics that impacted also our country together with the entire World. It has been a right and pleasing step both for us and our country to obtain a resource of this dimension and highly precious in this such a rough time. I attach much importance to this agreement in terms of continuity of our mission as one of the most important actors of our country in the international arena. It carries a great value for us because of the fact that it is the first syndicated loan indexed to the sustainability performance signed by a bank. We are proud to add another new one to our innovative sustainability practices that we have always pioneered as a bank. The environmental and social issues continue to exist even though we have focused on fighting against the epidemic. As the climate change preserves its urgency, besides of preparing grounds to epidemic illnesses such as the one we are experiencing now, it causes that we feel its effects much more deeply. We have observed that the companies adopting the sustainability approach for fighting against the epidemic are able to manage this process much more easily. For this reason we think that it is absolutely necessary to place the sustainability approach to the center of the new order that we are going to establish from now on. We have used our commitments regarding renewable energy for foreign borrowing instruments too for the first time through this contract which is the first syndicated loan having green loan structure. Besides the indicators regarding the financing we are providing to the energy sector, 100% Renewable Energy Contract that we have concluded in order to meet from renewable energy the electrical demand of our 813 branches and 45 buildings in year 2020 which is approximately 90 million kWh equivalent to the electric energy consumption of approximately 30 thousand homes has been included within the scope of this syndicated loan. With the purchase of renewable energy we will prevent approximately 45 thousand tons of CO2 which is equivalent to greenhouse gas that can be eliminated by more than 3 million trees in one year.”

 

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