The syndication of a $25 million, one-year loan for the private sector Eskisehir Bankasi (Esbank) began in mid-July. The bank is one of several local medium-sized institutions which are expected to approach the international market for pre-export finance during the next few months, bankers say.
The lead arranger for the Esbank loan is Bank of New York, with co-arrangers The Arab Investment Company and Standard Chartered Bank. The deal is expected to be signed by the end of the month.
The deal is being syndicated at an all-in cost, which includes fees of between 175-185 basis points over the London interbank offered rate (Libor). This compares with the all-in cost of 107 basis points over Libor on a one-year loan raised by one of the largest private sector institutions Garanti Bankasi.
Bankers say medium-sized institutions are still having to pay high premiums to attract international support. However, both public and private sector Turkish borrowers have been able to lower prices since April when the treasury raised a $500 million syndicated loan, the first such loan in a year.
Other medium-sized local banks are likely to wait until the start of the autumn before re-entering the international markets when costs are expected to come down further, the bankers say. The institutions include Iktisat Bankasi, which is expected to raise about $30 million. By autumn, domestic interest rates are likely to be moving upwards again, which will make the local market less attractive, bankers add.