Page 32 - TURKRptOct20

Turkey.
It was developed and built by a joint venture between Turkey’s ​Ronesans Healthcare and Japan’s Sojitz Corporation.
The EBRD funds will replace short-term loans from local banks that Ronesans Healthcare used to finance its equity contribution to the PPP project​, the development bank said in a statement.
Turkish private lender Akbank will open the autumn syndicated loans refinancing (refi) season with a deal that is likely to close soon​, Global Capital ​reported​ on September 18.
Despite a plethora of risks when it comes to Turkish assets, including the Turkish lira hitting fresh lows almost day by day and both banks and the sovereign experiencing downgrades, the bi-annual refi season for Turkey’s banks is up and running, according to the publication.
Akbank’s syndicated loan is already on the market, according to sources near the deal.
The lender aims to refinance its 367-day $812m-equivalent loan, arranged in two tranches of $402mn and €373.5mn, signed in October last year.
Moody’s Investors Service noted on September 15, when it downgraded the ratings of 13 banks in Turkey—following its September 11 unscheduled cutting of Turkey's sovereign rating by one notch to B2 (five notches below investment grade) with a negative outlook from B1 with a negative outlook—that Turkish banks have continued to maintain access to the syndicated loans market throughout the coronavirus (COVID-19) pandemic.
Turkish banks' orderly FX deleveraging has continued, with a 74% rollover rate in June (on a rolling three-month basis), and the average price for the eight syndicated loans refinanced in the spring season amid the coronavirus shock was marginally lower than in the autumn season of 2019, Fitch Ratings said on August 21, when it revised its outlook on Turkey's Long-Term Issuer Default Ratings (IDRs) to ‘Negative’ from ‘Stable’ and affirmed the IDRs at 'BB-', three notches below investment grade.
Turkish banks have 367-day—a ‘trick’ maturity to register loans as long-term using two extra days—syndicated loan renewals twice a year, with one in spring (April-May) and the other in autumn (October-November).
Akbank always sets the benchmark for interest rates.
In April, amid the first peak of the pandemic, Akbank managed to set costs at Libor+2.25% and Euribor+2.00%, lower than those of the March 2019 loan (Libor+2.50% and Euribor+2.40%), while only the cost of the euro tranche was slightly lower when held up against an October 2019 loan (Libor+2.25% and Euribor+2.10%).
However, rollover rates were low and a new feature called the ‘accordion’ has emerged, while, notably, the European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation (IFC) have supported the Turkish lenders’ rollovers.
Akbank’s costs in the upcoming deal are awaited while rollover rates will be watched in the subsequent deals.
Total
Renewal
Maturity
Tranche
Cost
Tranche
Cost
(mn)
Rate
(days)
1
1
2
2
May-20
Isbank
$800
78%
367
$208
Libor+2.25%
€539
Euribor+2.00%
32​ TURKEY Country Report​ October 2020 ​ ​www.intellinews.com