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Asset-Backed and Mortgage-Backed Securities
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Att. Nilay Celebi
General
In accordance with Turkish Civil Code (“Civil Code”) art. 970-
972, financial institutions that grant loans in exchange for mortgages
may issue bonds in exchange for their secured loan receivables in order
to finance the projects by collecting small amounts from investments
1
.
Thus, loan creditor financial institutions may issue bonds in exchange
for loan receivables that are secured by mortgages. Financial institu-
tions sell these secured bonds, and provide the receivables secured by
mortgages as security for the investors.
According to Civil Code art. 970, institutions that are authorized
by the relevant authority to grant loans in exchange for mortgages may
issue secured bonds in exchange for their receivables secured by mort-
gages, or their receivables arising from current business, even though no
agreement is concluded, and no liability concerning delivery is foreseen.
With respect to Civil Code art. 971, creditors shall not request the
payment of such secured bonds prior to the redemption plan being put
into place. As the loan granted by the financial institution has a deter-
mined payment plan, such bond shall adhere to the same redemption
plan.
Bonds shall be issued as registered, or to the bearer, and have reg-
istered coupons.
In accordance with Civil Code art. 972, issuers, conditions regard-
ing issuance, and the institutions authorized to grant permission for
CAPITAL MARKETS LAW
151
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Article of November 2014
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OGUZMAN, Kemal
;
SELICI, Ozer; OKTAY OZDEMIR, Saibe
, Esya Hukuku, Istanbul
2013, p. 1039.