Page 45 - TURKRptOct19

Turkey’s Akbank renews syndicated loan at 83% renewal ratio. Private lender Akbank, owned by conglomerate Sabanci, has obtained an $810mn- equivalent and 367-day syndicated loan in two tranches of $402mn with an all- in cost at Libor+2.25% and €373.5mn at Euribor+2.10%, it said on October 8 in a stock market filing.
The renewal rate of the syndicated loan stood at 83%, according to Reuters’ calculations.
On September 3, an Akbank spokesman told Bloomberg that the lender was offering a 185bp margin on the USD tranche and 170bp on the EUR portion, lower than the Libor+200bp and Euribor+190bp obtained in March.
In March, Akbank obtained a $700mn and 367-day syndicated loan. A $356mn tranche came with an all-in cost at Libor+2.50% while a €303mn tranche was pegged at Euribor+2.40%.
In September last year, Akbank obtained a 367-day and $985mn syndicated loan with costs rising by 140bp compared to April 2018. They were arranged at Libor+275bp for a $285mn tranche and Euribor+265bp for a €591mn tranche.
Turkish lenders’ syndicated loan renewal costs fell in the spring season of this year after booming in the autumn season of 2018 following the country’s currency crisis that peaked in August.
However, the renewal ratios are low, the costs remain higher than the pre- crisis costs and two-year maturities have disappeared despite positive headlines on Turkey’s progress with its economic recovery dominating media reports.
The Libor+2.50% and Euribor+2.40% costs seen in spring 2019 were almost double the Libor+1.30%s and Euribor+1.20%s seen a year back, while the 2- year, 1-day tranches seen in spring 2018 are no longer available.
On a positive note, the costs in the spring of this year compared lower than the Libor+2.75%s and Euribor+2.65%s seen in autumn 2018.
Akbank has again set the benchmark for its peers entering the Turkish lenders’ autumn syndicated loan refinancing season.
Along with Akbank, Isbank, TEB and Vakifbank were also in the market. Each bank was expecting a margin cut, Global Capital reported on October 3 in a story entitled “Turkish banks achieve tighter pricing in refi round”.
On October 8, the publication reported in a story entitled “Trump Turkey tweets impact ‘muted’” that US President Donald Trump’s Twitter salvo, warning
45 TURKEY Country Report October 2019 www.intellinews.com