JCR Eurasia Rating, has upgraded the credit rating of “Mega Varlık Yönetim A.Ş. “and the “Cash Flows Relating to the Planned Bond Issues” in the periodic annual review to ‘A-(Trk)/Positive’ on the Long Term National Scale and affirmed the rating of ‘A-2(T

JCR Eurasia Rating has evaluated “Mega Varlık Yönetim Anonim Şirketi” in a high-level investment category and has been upgraded its Long Term National Local Rating to “A- (Trk)”. Its Short Term National Scale has been affirmed at “A-2 (Trk)” the periodic annual review. Other notes and details of the ratings are given in the table below:

Long Term International Foreign Currency

:

BBB- / (Stable Outlook)

Long Term International Local Currency

:

BBB-/ (Stable Outlook)

Long Term National Local Rating

:

A- (Trk) / (Positive Outlook)

Long Term National Issue Rating

:

A- (Trk)

Short Term International Foreign Currency

:

A-3 / (Stable Outlook)

Short Term International Local Currency

:

A-3 / (Stable Outlook)

Short Term National Local Rating

:

A-2 (Trk) / (Stable Outlook)

Short Term National Issue Rating

:

A-2 (Trk)

Sponsor Support

:

2

Stand Alone

:

BC

Asset management companies,which purchase overdue receivables mainly from banks and other financial institutions, continues their operations in an environment where the national credit market has limited liquidity conditions following the completion of the regulatory studies regarding their establishment and activities by the BRSA in 2016; the sector’s corporate structure, the quality of financial reporting standards, the increase in standardization and transparency and provision of fair competition underwent a positive acceleration due to the minimum capital requirements, improvements in effective supervision and audit through improvements in legal infrastructure, and obligations regarding the foundation of risk management and internal control systems.

Mega Varlık Yönetim A.Ş., began operations in March 2015 to provide restructuring of assets and purchase or acquire through revenue sharing over-due receivables of banks and other financial institutions and to manage assets as well as provide consultancy services, has grown above the sector average in terms of total portfolio in the two-year period as a result of being a newly established company thanks to its boutique-style portfolio. The Company’s profitability ratios have maintained its ongoing path stemming from effective managements of operational, financial expenses and pricing policies. The Company’s equity level has increased thanks to internal equity generation stemming from dividend policy and continuation of management approach. The Company has strenghted its balance sheet structure to internal and external shocks.thorugh its paid-in capital during the year. Effective passive management through the funding provided by the main shareholder, expected cash flow from high-discounted real estate portfolio, asset value of current portfolio, efficiency of risk and opportunity management, existing credit limit, management team as well as increasing resilience of liquidity management through the bond issue have been the major factors underlying the upgrade of the Long Term National Rating to “A-/Positive” level by JCR-ER.

The pressure on financial costs due to upward trend of borrowing needs, abrasive pressure on the sector’s asset quality driven by shrinking real sector structure,the market volatility brought about by domestic and foreign economic and political developments and the detrimental effect of sharp exchange movements. Company’s international notches have been restricted with the Turkey’s sovereign ratings, where the company’s major part of the activities are being carried out. The notches and changes in outlook depend upon the continuity in the group's cash flow, stabilization of current equity to total debt ratios at higher levels through the generation of operational internal resources and the maintain the receivables quality. The developments of impaired receivables in the light of current sectorial deteriorations, the effects of the operating environment on the Company, the volatility of liquidity positions,the negative impact on capital adequacy that will be created by risks, and the effects of the developments in the real sector and market interest rates on the Company’s transaction volume, market share, profitability level, asset quality and debt structure are the major issues that will be kept under review by JCR Eurasia Rating. The resources planned to be raised from the debt issue will be carried within the Company’s balance sheet and as such no separate issue rating report will be documented and the resources have been analyzed within the current credit rating report. As the bonds to be issued has no differentiation in comparison to the Company’s otherliabilities from a legal and collateralization perspective, the corporate credit ratings also reflect the Company’s issue ratings.

It is considered that the major controlling real person shareholder, Mr. Jacob Ortell Kingston, has the willingness and experience to the ensure long term liquidity and equity within their financial capability when required and to provide efficient operational support to Mega Varlık Yönetim A.Ş.. In this regard, the Company's Sponsor Support grade has been affirmed at (2). The Stand-Alone grade has been affirmed at (BC) considering the ability of the Company to manage its undertaken incurred risks based on its own resources, the addition of retained earnings to paid- in capital and the levels of internal resource generation and current capitalization.

For more information regarding the rating results you may visit our internet site http://www.jcrer.com.tr or contact with our chief analyst Mr. Orkun İNAN

JCR EURASIA RATING

Yönetim Kurulu