ING Bank Turkey renews syndicated loan ahead of Turkish lenders’ refinancing season

ING Bank Turkey renews syndicated loan ahead of Turkish lenders’ refinancing season
Levent business district skyline as seen from the Bosphorus strait in Istanbul.
By Akin Nazli in Belgrade August 15, 2019

Dutch bank ING’s Turkish unit, ING Bank Turkey, on August 1 obtained a 367-day syndicated loan worth $305mn, the lender has announced.

The loan was made in two tranches. Its €190mn tranche has an all-in cost of Euribor+2.40% and its $96mn tranche Libor+2.50%.

The rollover ratio stood at 49%.

In July last year, ING Turkey renewed its syndicated loan by obtaining $625mn worth of 367-day financing at a renewal ratio of 113%, according to the lender’s annual report. A €498.5mn tranche came with a cost of Euribor+1.20% and a $42mn tranche Libor+1.30%.

Details of the $305mn syndicated loan were released on August 8 just prior to Turkey going into a long public holiday period.

ING Turkey ranked as Turkey’s 12th largest lender by assets, among a total of 47 local lenders, with a total asset volume of TRY60bn (share of Turkey banking industry assets around 2%) as of end-Q1, according to latest data from the Turkish Banks Association (TBB).

Higher costs
ING Turkey’s costs compared higher than the Libor+200bp and Euribor+200bp that Turkiye Sinai Kalkinma Bankasi (Industrial Development Bank of Turkey, or TSKB) obtained in July for a 367-day syndicated loan in tranches of €97.5mn and $67.5mn.

The autumn season for Turkish lenders’ syndicated loan renewals will be launched in September by private lender Akbank, as per usual.

Last year, the autumn season syndicated loan renewals came under particular focus following Turkey’s balance of payments crisis in August. However, Turkish lenders managed to overcome refinancing requirements despite higher costs and lower rollover ratios.

This year, the spring renewals season was also in the spotlight given the pressure caused by new waves of economic turbulence that began prior to the local elections held on March 31.

The Libor+2.50% and Euribor+2.40% costs seen in spring were almost double the Libor+1.30%s and Euribor+1.20%s seen a year back, while the 2-year, 1-day tranches seen in spring 2018 were no longer available.

However, the costs in spring of this year compared lower than the Libor+2.75%s and Euribor+2.65%s seen in autumn 2018.

Turkish lenders’ scheduled credit repayments across the next 12 months amounted to $40bn at end-May, according to the latest data from the central bank.