Buy - Sell

SKBNK (REDUCE, TP TL1.25) => Borrowed USD116m in a dual-currency syndication with 1-year maturity (USD47m + EUR52m) which corresponds to 118% rollover of last year's borrowing at a base cost (not all-in) of Libor/Euribor + 70bp. The mgmt has not shared the cost of the new syndication but we would assume around 25bp higher cost vs. last year. The syndication accounts for 1.4% of the bank’s assets as at 3Q12 and the rollover suggest a 0.2% addition to the balance sheet.

 

YKBNK (BUY, TP TL5.85) => Will restructure the interest rate on its USD585m subordinated loan it obtained in Feb’12 from Unicredit Bank Austria (which has a 10-year maturity with a repayment option after 5 years) to a fixed 5.5% down from 3M-Libor + 8.30%. This indicates to a c3.1% lower interest rate and a 1.1% saving in 2013E net income.

 

TKFEN (BUY, TP TL8.45) => Baku will host the first European Olympic Games in June 2015, according to an announcement by the committee on December 8. According to Azeri Minister of Youth and Sports, new sports facilities will be constructed in connection with the

games (one is the Baku Olympic Stadium, for which there was already a ground breaking ceremony; but we don’t know what stage the project is currently at). Recall that TKFEN has a strong experience in the country and could be among the strong candidates for project awards related to the games. TKFEN had a backlog of $2.3b as of Sep-12, and we see strong prospects for new large-scale projects such as Shah Deniz Phase II, STAR refinery and infrastructure projects in Qatar.

 

DOHOL (NR) => Will start talks with Akkok Group to buy its 50% stake in Akcez, which owns SEDAS (Sakarya electricity distribution company). Recall that AKENR (HOLD, TP TL 2.18) recently transferred its 45% stake in Akcez for TL250m to both Akkok Group and CEZ (entire company valued @ TL555m). In our view, Dogan Holding will pay a higher price than that amount.