TURKEY: Political solution helps trade loans

29 March 1996
NEWS

The formation of a new government has encouraged a flurry of one-year, external borrowing by domestic banks, led by Garanti Bankasi, which signed a $110 million loan on 15 March.

The Garanti loan has set a benchmark with an all-in cost of 80 basis points over the London interbank offered rate (Libor), and a base margin of 60 basis points over Libor, banking sources say.

Other banks seeking deals of between $30 million-50 million include Turk Ekonomi Bankasi (TEB), Korfez Bank, state Emlak Bankasi, Demirbank and Itkisat Bankasi, the banking sources say.

Korfez Bank expected to sign a $50 million loan by 29 March arranged by Citibank with a base margin of 100 basis points above Libor, plus fees of around 30 basis points.

Emlak Bankasi has awarded a mandate for a $30 million, one-year syndicated loan. The fully-underwritten, pre-export financing facility will have an all-in cost of 87.25 basis points over Libor, with a base margin of 50 basis points over Libor. The deal is expected to be signed by 15 April.

TEB has mandated a Japanese and a US institution for a deal in the region of $50 million, but pricing has yet to be dislosed.

Demirbank and Iktisat Bankasi have not yet awarded mandates. Demirbank expects to reach a decision in early April on a loan of around $40 million over one year, or for two years with a put option after one year. It will be seeking an interest rate of 80-90 basis points over Libor.

The deals are mostly being structured as export-financings to be eligible for exemptions from a 4 per cent special levy on new, short-term foreign borrowings. The surcharge was first introduced at a level of 6 per cent in September and subsequently lowered to 4 per cent at the beginning of 1996.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.