The treasury awarded a mandate on 30 June for a fully-underwritten $150 million one-year loan to finance domestic grain purchases to an arranging group of Citibank, Kredietbank, Rabobank and Islamic Investment Company of the Gulf, Istanbul bankers say. The loan will carry interest of

95 basis points over the London interbank offered rate (Libor).

The all-in price including fees is uncertain at present, but the group had asked for 160 basis points over Libor against the treasury's preferred 140 basis points, the bankers say. A syndication launch date has not been scheduled yet, but signing is expected in about a month's time.

The Soil Products Office (TMO), the state grains board, urgently needs the loan to finance its domestic grain purchases. The previous government had set the prices for the purchases high, in a bid to win electoral support from farmers, local press reported.

The Refah/True Path Party coalition, as a caretaker government, on 29 June also hiked import duties on wheat and corn. Millers and traders say the move is aimed at protecting the domestic harvest from a threatened surge of imports at cheaper international prices.

President Suleyman Demirel on 30 June approved a broad-based government headed by Premier Mesut Yilmaz to replace the Refah-led coalition.