Commentary & Deal Flow

Yapi Ve Kredi Bankasi A.Ş (YKBNK), exp issue ratings B by Fitch (issuer ratings Ba3 (Stable) / BB- (Stable) (Moody’s / Fitch)), US$500m 144A/Reg S 10.5nc5.5 Fixed Rate Resettable Tier 2 Notes due 6/11/36. Reset Date: 6/11/31. Reset Margin: [●] % per annum. Joint books: BofA/ENBD/FAB/ING/MUFG/Mashreq/Standard Chartered (B&D). Coupon Rate: Fixed rate of [●]% per annum from (and including) the Issue Date to (but excluding) the Reset Date. From (and including) the Reset Date to (but excluding) the Maturity Date, at a fixed rate per annum equal to the aggregate of (i) the Reset Margin and (ii) the CMT Rate. Issuer Call: The Issuer may redeem all but not some only, of the Notes then outstanding on any date from (and including) 11 March 2031 to (and including) the Reset Date, at their then Prevailing Principal Amount together with interest accrued and unpaid to (but excluding) the date of redemption, subject (if required by applicable law) to having obtained the prior approval of the BRSA. Regulatory Treatment: Basel III-compliant Tier 2 Capital. Ranking: The Notes will constitute direct, unsecured and subordinated obligations of the Issuer and shall, in the case of a Subordination Event and for so long as that Subordination Event subsists, rank subordinate to all senior obligations, pari passu without any preference among themselves and with all parity obligations; and in priority to all payments in respect of junior obligations (including ordinary and preferred shares and Additional Tier 1 instruments). Interest Payment Dates: Interest will be payable semi-annually in arrear on each of 11 June and 11 December in each year up to and including the Maturity Date. Day Count: 30/360. Redemption upon a Capital Disqualification Event or Tax Event: The Issuer may redeem all but not some only of the Notes then outstanding at any time at their then prevailing principal amount together with interest accrued and unpaid to (but excluding) the date of redemption upon the occurrence of a Capital Disqualification Event (full or partial regulatory disqualification), or subject to the prior approval of the BRSA, for tax reasons (additional amounts, withholding tax and loss of deductions for interest or where value of deductions is reduced (a “Tax Event”)). Substitution or Variation instead of Redemption: If at any time a Capital Disqualification Event or a Tax Event occurs, the Issuer may, subject to compliance with Applicable Banking Regulations and the approval of the BRSA, either substitute all (but not some only) of the Notes for, or vary the terms of the Notes accordingly, provided that they remain or, as appropriate, so that they become, Qualifying Tier 2 Securities (including having terms not materially less favourable to a Noteholder than the terms of the Notes). Non-Viability/Write-Down Of the Notes: The Notes are subject to loss absorption upon the occurrence of a Non-Viability Event (as may be determined by the BRSA) which may result in permanent write-down of the whole or part of the Notes in conjunction with loss absorption by junior obligations, taking into account under the terms of the notes the absorption of losses by all junior obligations to the maximum extent possible or otherwise allowed by law and the pro-rata write-down with any other parity loss-absorbing instruments. Non-Viability Event means the determination by the BRSA that, upon the incurrence of a loss by the Issuer (on a consolidated or non-consolidated basis), the Issuer has become, or it is probable that the Issuer will become, Non-Viable. Non-Viable means, in the case of the Issuer, where the Issuer is at the point at which the BRSA may determine pursuant to Article 71 of the Banking Law (No. 5411) that: (i) its operating licence is to be revoked and the Issuer liquidated or (ii) the rights of all of its shareholders (except to dividends), and the management and supervision of the Issuer, are to be transferred to the Savings Deposit Insurance Fund (Tasarruf Mevduatı Sigorta Fonu) of Türkiye on the condition that losses are deducted from the capital of existing shareholders. Documentation: Drawdown under the Issuer’s U.S.$11bn GMTN Programme. Listing: Euronext Dublin Regulated Market. Governing Law: English Law, except for the status of the Notes which will be governed by Turkish law. First Pay: 6/11/26. Denominations: US$200,000 and integral multiples of US$1,000 in excess thereof. UOP: General corporate purposes, which may include the redemption of the Issuer’s outstanding U.S.$500 million fixed rate resettable Tier 2 notes due 2031. Netroadshow: Link: www.netroadshow.com/nrs/home/#!/?show=29e5dbd1Code: YKBNK2025. Pricing 12/4. Settle: 12/11 (T+5). 144A ISIN: US984848AW11.
IPTs: 8.000% area.

PRICED: $500m 7.55% 6/11/36 100.00 7.55%. Back-end reset: T+383.1.