Recent syndication outlook of Turkish banks

EBRU USTA/BLOOMBERG HT MONEY AND CAPITAL MARKETS MANAGER

Turkish banks are announcing the first syndicated loan agreements of the year.

Foreign borrowing, which started in March under the leadership of the Turkey Wealth Fund, continued in April with Ziraat Bank. On March 23, the interest rate on TWF’s 790 million euro 2-year borrowing was Euribor + 4.25 percent.

While the borrowing cost was not specified in Ziraat Bank’s syndication of 779 million euros + 423 million dollars at the beginning of April, the rollover rate in this syndicated loan was 103 percent.

While syndications continued with Akbank in April, it was observed that Akbank’s renewal rate was above 100 percent. Akbank renewed the loan of 177.50 million euros + 225 million dollars, which it obtained in October, as 233 million euros + 245.50 million dollars, while the cost remained the same as Euribor + 4.00 percent and SOFR + 4.25.

The pricing in global bond yields was effective in costs.

The pricing in global bond rates was effective in the increase in costs in the last 1-year period. While the first syndications of 2023 took place in April-May, the costs were at the same level as in the second half of last year. However, the approximately 2-fold increase in interest rates compared to the same period of the previous year reflected the increase in global interest rates.

In May of this year, the cost of Vakıfbank’s syndication loan of 575.50 million euros + 189.50 million dollars was at the same level.

QNB Finansbank, on the other hand, signed an agreement to provide a syndicated loan consisting of two tranches, 143.50 million euros and 171 million dollars, in May. In this loan, the cost remained the same as Euribor + 4.00 percent and SOFR + 4.25.

Yapı Kredi secured a syndicated loan of EUR 353.4 million + USD 201.5 million consisting of two separate tranches on 1 June. The cost of the loan remained the same at Euribor + 4.00 percent and SOFR + 4.25.

In November, the bank signed a sustainability-related syndicated loan agreement of approximately $458 million in two tranches, amounting to 249 million euros and 210 million dollars. In November, the bank’s syndication conversion rate was recorded as 61 percent, the interest rate was again Euribor + 4.00 percent and SOFR + 4.25.

Garanti Bank also announced its syndication loan on 2 June. The interest of the two tranches loan amounting to 218.5 million euro + 199 million dollars was at the same level as the borrowing cost made in November. In the April syndication of last year, while SOFR + 2.75 percent for the dollar tranche was SOFR + 2.75 percent for the euro tranche, Euribor + 2.10 percent, this cost increased to SOFR + 4.25 percent and Euribor plus 4 percent in the November period.

Costs increased compared to a year ago

İşbank announced on June 6 that it signed a syndication loan agreement with a maturity of 367 days in the amount of 388.25 million euros and 224 million dollars. In the syndication provided in November, the amounts were slightly higher, while the costs remained the same.

However, as in other banks, costs increased in İşbank compared to the June syndication of last year. While SOFR + 2.75 percent for the dollar tranche and Euribor + 2.10 percent for the euro tranche were in borrowing a year ago, this cost increased to SOFR + 4.25 percent and Euribor plus 4 percent in the November period.

Denizbank also announced that it had obtained a loan with a 7-year maturity of 610 million dollars in May with an interest rate of Euribor + 3.9 percent for the securitization financing. This loan was the first earthquake-related loan given by Proparco and the EBRD in Turkey, as well as the first securitization transaction that Proparco participated in Turkey.