Turkish private lender Akbank has secured a seemingly delayed multi-currency syndicated loan facility from international markets equivalent to $980mn, comprised of $285mn and €591mn with a maturity of 367 days, the lender said on September 27 in a bourse filing.

The all-in annual costs for the tranches are Libor+2.75% and Euribor+2.65%, more than double the costs Akbank experienced when agreeing its last such loan.

Banks are under heightened pressure in Turkey when it comes to raising funding given that the country is in the midst of a currency crisis that some analysts fear could spark a banking crisis. Turkish banks traditionally agree two loans per year, one in spring and one in autumn. Akbank’s refinancing typically closes in August, setting a pricing benchmark for other lenders to follow. But this year, the refinancing round appeared to get held up as international lenders assessed the consequences of the severe currency sell-off, bankers have told news agencies.

A week ago markets were unhappy Turkish Finance Minister Berat Albayrak did not introduce a ‘bad bank’ to address non-performing loans in the country’s new three-year medium term economic programme. There is pressure on the government to work with the banks to help clear up their balance sheets in order to help encourage foreign banks to roll over FX debts. On a brighter note, the Turkish lira (TRY), made it past the 6-to-the-dollar threshold on September 27, partly as a result of the loan news from Akbank. By around 17:30 local time it was 1.9% stronger on the day against the USD, trading at 5.9891.

Akbank and Turk Eximbank have increased pricing on syndicated loans to encourage international lenders to join the deals, banking sources told Reuters on September 4, with Turkey’s financial crisis showing no sign of abating. Pricing was pushed up on a $930mn loan for Akbank and a $350mn loan for Turk Eximbank to around 200bp for one-year tranches and around 300bp for two-year tranches, bankers told the news agency.

The lenders were said to have been in talks to renew their syndicated loans since the beginning of August.

Now markets await Turk Eximbank, Isbank and foreign-held local lenders to finalise syndicated loans in the renewal cycle. Adnan Yildirim, general manager of Turk Eximbank, said on September 27 in a tweet that the bank had concluded a non-deal roadshow in London.

“Relief all around…,” Timothy Ash of Bluebay Asset Management said in an e-mailed comment although the jump in costs was not too encouraging.

In August 2017, Akbank secured a multi-currency syndicated loan facility from international markets in the amount of $1.15bn-equivalent, comprising of $543mnn and €515mn tranches.

The USD-equivalent of the 945mn part of the loan facility had a one-year tenor, whereas the two-year tenor was for $205mn.

The all-in costs for the one-year tranches were Libor+1.35% and Euribor+1.25%, and Libor+2.20% for the 2-year tranche.

Moody's Investors Service has lowered Turkey's country ceiling for long-term foreign currency bank deposits to B2 from B1, the rating agency said on September 24.

The forex liquidity risk of Turkish banks has heightened significantly amid the ongoing market volatility and currency collapse in Turkey. That is highlighted by recent deposit outflows, Fitch Ratings warned on September 24 in a report on Turkish banks’ external debt.