By Ben Edwards
Turkish brewer Anadolu Efes Biracilik ve Malt Sanayi AS
(AEFES.IS) tapped the debt markets Friday with the first
investment-grade corporate bond ever to be issued out of
Turkey.
The brewer of market-leading Turkish beer Efes Pilsen was
seeking to price the $500 million, 10-year bond in the area of 175
basis points over the reference U.S. Treasury, about five basis
points lower than where Turkey's government bonds are trading.
"It's the fifth largest brewer in Europe and the 12th largest in
the world, so it's really being sold as a global brewing company,"
a person familiar with the deal said.
Demand for the bond is solid, with pricing being revised down
from initial guidance of 225 basis points over Treasuries, the
person said.
To put that rate in perspective, earlier this month Dutch brewer
Heineken sold a four-part, $3.5 billion bond, with the 10.5-year
tranche pricing at 115 basis points over equivalent Treasuries.
For global fund managers looking for diversification, some
analysts reckon bondholders might look at Anadolu as a more
attractive alternative to lower yielding debt from other European
brewers such as Heineken or Carlsberg.
But for emerging market investors, the price of the bond
relative to the underlying sovereign may be less appealing, despite
the rarity factor.
"It looks like it's going to price flat or close to the
sovereign, so from an emerging market perspective, why would you
own this over a more liquid sovereign?" said Warren Hyland,
fixed-income fund manager at Schroders.
However, because Anadolu has a strong credit profile, it is
still a bond Schroders would consider buying at the right price,
Mr. Hyland added.
In March, Anadolu took control of SABMiller PLC's beer-related
business in Russia and Ukraine in exchange for SABMiller taking a
24% stake in the Turkish brewer.
That transaction made Anadolu the second-largest player in the
Russian beer market with a 20% market share by value, Standard
& Poor's Corp. said in a statement on the Turkish brewer's
credit rating.
Anadolu is rated one notch above junk by Moody's Investors
Service Inc. and S&P, the only non-financial company in Turkey
to be granted investment-grade status. Turkish sovereign debt is
rated one notch below investment grade by Moody's and Fitch
Ratings, and two below by S&P.
(Sarka Halas in London contributed to this article.)
Write to Ben Edwards at ben.edwards@dowjones.com