Page 22 - Turkey Outlook 2023

The 10 largest Turkish banks’ combined syndicated loan rollover
rate fell to 78% in H2 2022 while the cost jumped to 7%.

Given the situation in regard to the widely doubted reliability of Turkey’s
official macro data releases, syndicated loan renewals are a good
indicator for following developments in the sustainability of Turkey’s
external debt burden.

The autumn syndicated loan renewals season did not provide an
encouraging signal, though a systemic default is still not seen as on the
cards.

In the spring season of 2023, 11 banks are to renew a combined sum of
$7bn. And, in the autumn season, nine banks are to roll over a
combined sum of $4bn.

The share of syndicated loans in Turkey’s and Turkish banks’ external
funding composition has declined in recent years. Turkey rolls over a
combined sum of around $150-200bn each year.

Prior to each syndicated loan refinancing season, it is a tradition for the
finance industry to froth over whether Turkish banks will be able to
renew their loans. Critics say it's a ruse in the pursuit of securing higher
returns.

At the end of the day, let’s remember: “If you owe the bank $100, that's
your problem. If you owe the bank $100mn, that's the bank's problem.”

Dealing with a Turkey default would be the finance industry’s problem.
Turkey knows that pretty well.

Turkish banks conduct 367-day—a ‘trick’ maturity for registering loans
as long-term by using two extra days—syndicated loan renewal
seasons twice a year, with one season in spring (April-July) and the
other in the autumn (October-November).

22 Turkey Outlook 2023 www.intellinews.com