Turkey’s Akbank, Ulker secure syndicated loan renewal deals amid sudden economic stop concerns

Turkey’s Akbank, Ulker secure syndicated loan renewal deals amid sudden economic stop concerns
By Akin Nazli in Belgrade April 2, 2020

Turkish private lender Akbank, owned by the Sabanci conglomerate, has obtained an $560mn-equivalent and 367-day syndicated loan in two tranches of $246mn and €284mn with all-in costs at Libor+2.25% and Euribor+2.00%, it said on October 8 in a stock market filing.

The renewal rate of the syndicated loan stood at 80% as the lender obtained in March last year a $700mn loan. However, Akbank noted in its filing that the total loan amount may be increased through the “accordion” feature of the facility until the drawdown date of April 9.

The costs of the loan compared lower than those of the March 2019 loan (Libor+2.50% and Euribor+2.40%) while only the cost of the euro tranche was slightly lower when held up against an October 2019 loan (Libor+2.25% and Euribor+2.10%), when the renewal rate stood at 83%.

The announcement of the Akbank loan came as Jason Tuvey of Capital Economics circulated a note entitled “Turkey: banks more vulnerable than in currency crisis”. “Turkey’s banks muddled through the [Turkish lira] currency crisis two years ago, but they are now in a weaker position to confront the economic and financial market fallout from the coronavirus outbreak,”

Turkish lenders’ syndicated loan renewal costs fell in the spring season of 2019 after booming in the autumn season of 2018 following the country’s currency crisis that peaked in August.

However, the renewal ratios are still low, the costs remain higher than the pre-crisis costs and two-year maturities have disappeared.

The Libor+2.50% and Euribor+2.40% costs seen in spring 2019 were almost double the Libor+1.30%s and Euribor+1.20%s seen a year before, while the two-year, one-day tranches seen in spring 2018 are no longer available.

On a positive note, the costs in the spring of 2019 compared lower than the Libor+2.75%s and Euribor+2.65%s seen in autumn 2018.

Despite concerns over a “coronavirus (COVID-19) sudden stop” in capital flows to emerging markets, Akbank has managed to again set the benchmark for its peers entering the Turkish lenders’ spring syndicated loan refinancing season.

State-owned Ziraat Bank has a $1.4bn and one-year loan obtained in March 2019 from Emirates NBD while Eximbank needs to renew a $100mn loan in April along with Ziraat Katilim ($250mn) and Vakifbank ($1.1bn).

In May, Yapi Kredi Bank ($1bn), Garanti BBVA ($784mn) and Isbank ($1.03bn) will be in the queue.

Also on April 2, Yildiz Holding-owned Ulker Biskuvi, a biscuit and confectionery producer that is one of Turkey’s largest food companies, said in a stock exchange filing that it obtained a $455mn syndicated loan with a maturity of three years.

Seven international banks, including Bank of America (global coordinator, bookrunner and initial mandated lead arranger), Rabobank, (bookrunner and initial mandated lead arranger) and Emirates NBD (bookrunner and initial mandated lead arranger) participated in the loan, according to Ulker.

The loan consists of a syndicated facility of $374mn and a parallel loan of €75mn provided by the European Bank For Reconstruction and Development (EBRD), the largest lender among eight international financiers in the transaction, the EBRD said on April 2 in a separate statement. The EBRD has previously provided a total of €100mn to support Ulker’s operations in Turkey and Kazakhstan.

The latest syndication loan is composed of two trenches of $110mn and €244, according to the filing by Ulker.

Ulker will use the loan to refinance a $375mn syndicated loan maturing this month, suggesting a renewal rate of 121%.

Ulker did not provide costs but it said interest payments will be made semi-annually.

The company has also a $450mn syndicated loan maturing in November 2020.

Lenders demonstrated unwavering appetite for Turkish debt, Global Capital reported on April 1 in a story entitled “Akbank and Ulker raise loans, lenders demonstrate resilience”.

Moody’s Investor Services said on March 31 that risks from the coronavirus crisis went beyond frontier markets to encompass emerging markets such as Turkey and Tunisia that are most reliant on foreign currency debt. 

The sudden economic stop will bring intense credit pressure to bear on borrowers worldwide as slumping cash flows and tight financing conditions weigh on creditworthiness, Standard & Poor’s (S&P) said on April 1 in its Global Credit Conditions report entitled “Triple Trouble: Virus, Oil, Volatility”.


Major external financing obtained by Turkish borrowers
    Total Renewal Maturity Tranche Cost Tranche Cost
    (mn) Rate (days) 1 1 2 2
Apr-20 Akbank $560 80% 367 $246 Libor+2.25% €284 Libor+2.25%
Apr-20 Ulker $455 121% 3-year $110   €244 €75
Mar-20 Turkcell €50 ING 5-year   Euribor+1.95%    
Jan-20 Borusan EnBW $74 China EBRD        
Jan-20 Getir $38 Moritz Crankstart        
Dec-19 Garanti $133   6-year IFC OeEB GGF  
Dec-19 Garanti $300 China 3-year        
Dec-19 Asyaport $24 EBRD, IFC          
Dec-19 Migros TRY31 EBRD bond        
Dec-19 May Seed €10 EBRD     TLREF    
Dec-19 TKYB €45 KfW 40-year solar      
Dec-19 QNB Finansbank $457 new 367 $59 3-year 1-day $150 €184 3-year 1-day €40
Dec-19 ISMEP $300 AIIB          
Dec-19 Denizbank $1,100 syndicated new   Libor+2.25%   Euribor+2.10%
Dec-19 En. Ministry $200 IBRD, CTF          
Dec-19 Enerjisa $100 EBRD     TLREF TRY-denominated  
Dec-19 TKYB $200 AIIB 15-year        
Dec-19 Ceyport €18 EBRD          
Dec-19 oBilet $4 EBRD equity        
Dec-19 Turkcell €500 China 8-year grace 3-year    
Nov-19 Mersin €17 AFD          
Nov-19 Vakifbank $580 82% 367 $240 Libor+2.25% €309 Euribor+2.10%
Nov-19 Vakifbank $150   3.5-year        
Nov-19 TuREEFF $350 EBRD, EU since 2015        
Nov-19 Central bank $5,000 Qatar swap        
Nov-19 Garanti $802 87% 367 $230 Libor+2.25% €519 Euribor+2.10%
Nov-19 Finansleasing €50 EBRD          
Nov-19 Istanbul M. €40 BSTDB 7-year   2.5-year grace    
Nov-19 Istanbul M. €198 BNP Paribas 11.3-year   1.8-year grace  
Nov-19 Istanbul M. €80 BNP Paribas 7-year   2.5-year grace  
Nov-19 Eximbank €500   1-year   Libor+2.35%   Euribor+2.25%
Nov-19 Sisecam €100 EBRD         Euribor+2.4%
Nov-19 Istanbul M. €86 AFD 10-year   3.5-year grace    
Nov-19 TSKB €85 AFD          
Nov-19 Isbank $820 84% 367 $215 Libor+2.25% €545 Euribor+2.10%
Oct-19 TEB $401 75% 367 $62 Libor+2.25% €306 Euribor+2.10%
Oct-19 Yapi Kredi $950 91% 367 $370 Libor+2.25% €520 Euribor+2.10%
Oct-19 Trakya Cam €200   3-year €175 Euribor+2.65% €25 Euribor+2.95%
Oct-19 Istanbul €110 Deutsche 5-year        
Oct-19 Vakifbank $417 securitization 7-year   3-year grace    
Oct-19 Istanbul €86 AFD          
Oct-19 Akbank $810 83% 367 $402 Libor+2.25% €374 Euribor+2.10%
Sep-19 Vakifbank $140 China 1-year        
Sep-19 TKYB €14 KfW 20-year        
Sep-19 Isik Organic €16 EBRD          
Sep-19 TSKB $200 China Development Bank        
Aug-19 Istanbul €73 BSTDB 7-year   3-year grace  
Aug-19 Istanbul €98 EBRD 7-year   3-year grace  
Aug-19 ING Turkey $305 49% 367 $96 Libor+2.50% €190 Euribor+2.40%
Aug-19 Educ. Min. €268 IBRD          
Jul-19 TSKB $177 80% 367 $68 Libor+2.00% €98 Euribor+2.00%
Jul-19 Efeler $350 AIIB, $100mn EBRD, $60 TSKB$50 Isbank, $90mn BSTDB, $20 ICBC Turkey, $30mn
Jul-19 Ilbank €500 World Bank 30-year 5-year grace    
Jun-19 Eximbank €180 ING Bank 5-year   3-year grace    
Jun-19 Suez-Altas TRY57.5 EBRD          
May-19 Eximbank $350 ICBC 2.8-year   2.8-year grace    
May-19 TSKB €50 EBRD          
May-19 Isbank $1,030 69% 367 $324 Libor+2.50% €645 Euribor+2.40%
May-19 Garanti $784 63% 367 $326 Libor+2.50% €409 Euribor+2.40%
May-19 Railport $60 EBRD, ICBC Turkey          
May-19 Yapi Kredi $1,000 77% 367 $350 Libor+2.50% €607 Euribor+2.40%
Apr-19 Sarten Ambalaj €25 EBRD          
Apr-19 Vakifbank $1,100   367 $280 Libor+2.50% €724 Euribor+2.40%
Apr-19 Turksat $325 UK Export Finance        
Apr-19 Finance Ministry €150 AFD          
Apr-19 Ziraat Katilim $250   367        
Apr-19 Eximbank $630   1-year, 2-year $184 Libor+2.75% €398 Euribor+2.65%
Apr-19 Eximbank $84 Mitsubishi 2-year $50 2-year grace €30 2-year grace
Mar-19 Ziraat $1,422 Emirates NBD 1-year $470 Libor+2.50% €849 Euribor+2.40%
Mar-19 Akbank $700   367 $356 Libor+2.50% €303 Euribor+2.40%
Mar-19 Arcelik TRY1,000 EBRD          
Mar-19 TWF €1,000 Coordinator: Citi, ICBC 2-year   Euribor+2.75%    
Mar-19 Ziraat $75 NCB 1-year        
Feb-19 Ziraat $50 NCB 1-year        
Feb-19 Migros TRY40 EBRD Purchase of local bonds issued total of TRY200mn
Feb-19 Ziraat $100 Citibank 1-year        
Feb-19 Hayat Varlik TRY100 EBRD          
Feb-19 State Hydro Works $222 IBRD          
Feb-19 Tam Faktoring TRY100 EBRD          
Feb-19 Istanbul Municipality €100 Societe General 11.5-year   2-year grace    
Jan-19 State Forestry $8 IFAD          
Jan-19 Eximbank $500 Citibank 5-year   5-year grace