Lease Certificate. Investor Guide

Transcription

1 Republic of Turkey Prime Ministry Undersecretariat of Treasury Lease Certificate Investor Guide

2 TABLE OF CONTENTS I. GENERAL INFORMATION... 3 II. FEATURES OF LEASE CERTIFICATES... 5 Lease Certificate Investor Guide 2

3 I. GENERAL INFORMATION Lease certificates are the securities designed by the asset leasing companies in their own name and own behalf and for the account of and the benefit of certificate holders to provide the financing of assets that are taken over by special purpose vehicles through sale or lease agreements and to give the holders of the security the entitlement to the revenues generated from these assets in proportion to the holders share. Lease certificates are issued by various developed and emerging economies. Set out below is a simplified structure diagram of the lease certificates that will be issued by the Hazine Müsteşarlığı Varlık Kiralama Şirketi (HMVKŞ). ISSUE OF LEASE CERTIFICATE Undersecretariat of Treasury (2) Leasing of the Real Estates (5) Transfer of Revenues from the Issuance to the Treasury (1) Take Over of the Real Estate (6) Rental/Sale Revenue (3) Issuance of Lease Certificate (7) Rental /Principal Payments Hazine Müsteşarlığı Varlık Kiralama Şirketi (HMVKŞ) Investors (4) Proceeds of Certificates In this context, the steps of a lease certificate issuance are explained below in details 1. 1) Within the context of Article 7/A of Law Number 4749 on Regulating Public Finance and Debt Management, takeover of the public real estates through sale to the Hazine Müsteşarlığı Varlık Kiralama Şirketi is realized. At the same time, the immovables are registered to deed in the name of HMVKŞ. 1 The diagram displays the general procedure of a lease certificate issue rather than an exact time schedule of the process. Lease Certificate Investor Guide 3

4 2) Provided that the beneficiary institutions continue to utilize the assets that are taken over by the HMVKŞ, a lease agreement, apart from the deal of takeover through sale stated in Article 1, is signed between the Undersecretariat of Treasury and the HMVKŞ. Moreover, a letter of a purchase undertaking of these immovable by the Treasury at the end of the lease period are committed. On the other hand, before the issue, HMVKŞ gives out a declaration to address the preservation of the aforementioned assets on its own name and on its own behalf and for the account of and the benefit of certificate holders. 3) In return for the leasing of the assets purchased by the HMVKŞ to the Undersecretariat of Treasury, lease certificates are issued that provide investors to merit rental proceeds from the assets on a pro rata basis. 4) The amount of payment by the investors in return to the lease certificates is transferred to HMVKŞ. 5) Proceeds of lease certificates are transferred to Undersecretariat of Treasury from the HMVKŞ in return for the asset takeover. 6) In the context of the lease agreement and the purchase undertaking between the Undersecretariat of Treasury and the HMVKŞ, rental payments are fulfilled by the Undersecretariat of Treasury to the HMVKŞ during the life of lease contract and a payment is made in return for the repurchase of immovable by the Undersecretariat of Treasury at the end period of the lease agreement. 7) Rental proceeds on a pro rata basis and the principal payment of the lease certificates are allocated to the certificate holders by the HMVKŞ. Lease Certificate Investor Guide 4

5 II. FEATURES OF LEASE CERTIFICATES Lease certificates to be issued include the following features: Lease certificates will be issued through Direct Sale. Each of the TL denominated lease certificates will have a nominal value of 100 TL. Lease certificates will be issued with the lease period of 6 months. Lease certificates will be traded on the Borsa İstanbul Debt Securities Market. Lease certificates will be accepted as collateral within the context of Public Procurement Law No and may be submitted as collateral in the payments of public property sale. Lease certificates are subject to the prevailing tax legislations and will be taxed in accordance with the Article 67 of the Income Tax Law. Price of the lease certificates set as a precedent will be published daily on the Official Gazette. HMVKŞ has the right to purchase, sell, or dispose of the leased immovables via exchanging with an asset in equivalent value, as shall be deemed necessary and beneficial. In case of partial or full failure of payment of the winning bid amount in the sale, investors must attend at least 4 direct sale with collateral of 20% of their total nominal bid amount. If the investors attending the direct sale with collateral of 20% do not pay the required amount over the collateral, they must attend the subsequent sales with collateral of 100%. After attending 4 sales with the increased collaterals, investors may attend the sales again with no collateral with the Undersecretariat s approval. Lease Certificate Investor Guide 5