TURKEY: Foreign funding for local contractor

15 November 1996

International project financing totalling $91.75 million is being lined up for local contractor Bayindir for the completion of an Aegean motorwaycontract, and construction of an international terminal at the Mediterranean resort city of Antalya, bankers say.

Citibank has been awarded a mandate by the treasury to arrange a $50 million, three-year loan to support completion by Bayindir of the 120- kilometre motorway between Izmir and Cesme on the Aegean coast. The loan will also finance outstanding payments on the project. It will carry annual base interest of around 190 basis points over the London interbank offered rate (Libor), and an all-in cost of 250 basis points over Libor.

A $41.75 million loan arranged with the help of Salomon Brothers for the construction on a build-operate-transfer (BOT) basis of the Antalya terminal has been signed with a consortum of German banks led by Bayerische Vereinsbank. The five-year loan with two years' grace carries interest of 325 basis points over Libor. It is not backed by a treasury guarantee, but is guaranteed by Bayindir and a letter of credit from state institution Vakiflar Bankasi.

Construction of the $65 million terminal for the state airports authority will be completed in August 1998, when the nominal international passenger capacity of the airport will be increased to an annual 8 million from the present 3 million.

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