Akbank launches autumn syndicated loan renewals season for Turkish banks at better costs

Akbank launches autumn syndicated loan renewals season for Turkish banks at better costs
/ bne IntelliNews
By Akin Nazli in Belgrade October 29, 2023

Akbank (AKBNK), a unit of Turkish conglomerate Sabanci Holding (SAHOL), has obtained a 367-day sustainability-linked syndicated loan in two tranches of $266mn and €318mn, the lender said on October 27.

Story chart: Turkish corporates’ external debt rollover rates.

A total of 36 banks from 18 different countries, including 13 newcomers, participated in the facility.

The renewal rate jumped to 146%, while spreads fell sharply by 75bp. This could be seen as the first clear sign of the benefits of Turkey’s so-called economic normalisation policy applied since June.

The cost of the USD-tranche stood at the guaranteed overnight financing rate (SOFR) plus 350bp while the cost of the EUR-tranche was the euro interbank offered rate (Euribor) plus 325bp.

In October 2022, Akbank launched the autumn syndicated loan renewals season for local peers at a rollover rate of 60% and at record high spreads of SOFR+4.25% and Euribor+4.00%.

Despite the significant recovery in spreads, the costs still stand close to the double digits as the benchmarks remain painfully high.

SOFR persists above the 5%-level, compared with the 0.05% seen in October 2021, while 12-month Euribor remains above the 4%-level, compared with the minus 0.5% recorded in October 2021.

All the benchmarks have been on the rise in parallel with the global monetary tightening trend, which was expected to go into reverse this year. However, it seems rate cuts have been delayed to 2024.

In November 2024, the US is to hold its presidential election. Monetary policy moves have around a six-month lag in showing an impact on the real economy. The Biden administration may enter the election period with a tight monetary stance.

In line with local peers, Akbank, the sixth largest bank in Turkey with Turkish lira (TRY) 1.4 trillion ($53bn) worth of assets at end-June, has a B-/Stable (one notch below Turkey’s sovereign rating and six notches below investment grade) from Fitch Ratings and a B3/Stable (six notches below investment grade in line with Turkey’s sovereign rating) from Moody’s Investors Service.

Chart: Akbank’s wholesale funding profile as of October.

In the autumn season this year, a total of nine Turkish banks will roll a combined sum of $4bn. (See the full list below).

In the autumn refinancing season of 2022, nine Turkish banks rolled a combined sum of $6bn at a rollover rate of 77%. The costs were in line with the benchmarks set by Akbank, namely SOFR+4.25% and Euribor+4.00%.

In the spring season of 2023, 11 banks renewed a combined sum of $7bn at a combined rollover rate of 88%. All costs were reported as in line with the benchmarks set by Akbank, namely SOFR+4.25% and Euribor+4.00%.

Chart: Rollover Ratio of Syndicated Loans and Cost of Syndicated loans calculated by the central bank for the top 10 big-cap banks.

Turkish banks conduct 367-day (a ‘trick’ maturity for registering loans as long-term that uses two extra days) syndicated loan renewal seasons twice a year, with one season in spring (April-July) and the other in autumn (October-November).

They release identical costs in syndicated loan renewals, while some of the lenders, particularly smaller ones, pay higher fees.

Across recent years, Akbank has set the Turkey benchmark for the interest rates each season. In April 2022 and 2023, Ziraat Bank launched the spring seasons. However, Ziraat could not provide the costs this year. It awaited Akbank’s released costs to provide its costs.

The share of syndicated loans in Turkey’s and Turkish banks’ external funding composition has declined in recent years. Turkey rolls over a combined sum of around $150-200bn each year.

Nevertheless, the banks’ syndicated loan renewals are a good indicator in following developments in the sustainability of Turkey’s external debt burden.


    Total Renewal Maturity Tranche Cost Tranche Cost
    (mn) Rate (days) 1 1 2 2
Oct-23 Akbank (AKBNK) $600 146% 367-day $318 SOFR+3.50% €266 Euribor+3.25%
Jul-23 TSKB (TSKB) $123 113% 367-day $18   €94  
Jun-23 ING Turkey €332 112% 367-day   SOFR+4.25%   Euribor+4.00%
Jun-23 Denizbank $530 117% 364-367-day $297   €183 Chinese yuan 255mn
Jun-23 Isbank (ISCTR) $639 83% 367-day $224 SOFR+4.25% €388 Euribor+4.00%
Jun-23 Garanti BBVA (GARAN) $433 73% 367-day $199 SOFR+4.25% €219 Euribor+4.00%
Jun-23 Yapi Kredi (YKBNK) $580 78% 367-day $202 SOFR+4.25% €353 Euribor+4.00%
May-23 QNB Finansbank (QNBFB) $329 102% 367-day $171 SOFR+4.25% €144 Euribor+4.00%
May-23 Vakifbank (VAKBN) $817 81% 367-day $190 SOFR+4.25% €576 Euribor+4.00%
May-23 Turk Eximbank $670 89% 364-day $54   €522 Chinese yuan 325mn
Apr-23 Akbank (AKBNK) $500 71% 367-day $246 SOFR+4.25% €233 Euribor+4.00%
Apr-23 Ziraat Bank $1,300 103% 367-day $432   €779  
Nov-22 Garanti BBVA (GARAN) $401 65% 367-day $155 SOFR+4.25% €239 Euribor+4.00%
Nov-22 QNB Finansbank (QNBFB) $545 104% 367-day $185 SOFR+4.25% €253 Euribor+4.00%
Nov-22 Vakifbank (VAKBN) $560 91% 367-day $223 SOFR+4.25% €328 Euribor+4.00%
Nov-22 Isbank (ISCTR) $535 69% 367-day $191 SOFR+4.25% €331 Euribor+4.00%
Nov-22 Turk Eximbank $588 101% 1-year €404   €136 Chinese yuan 350mn
Nov-22 Denizbank $606 78% 367-day $277 SOFR+4.25% €330 Euribor+4.00%
Nov-22 Yapi Kredi Bank (YKBNK) $458 61% 367-day $210 SOFR+4.25% €249 Euribor+4.00%
Oct-22 TEB $262 77% 367-day $64 SOFR+4.25% €200 Euribor+4.00%
Oct-22 Akbank (AKBNK) $403 60% 367-day $225 SOFR+4.25% €178 Euribor+4.00%


Table: Full list of Turkish banks’ syndicated loan renewals.



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