Turk Ekonomi Bankasi rolls syndicated loan at 120% renewal rate

By Akin Nazli in Belgrade November 1, 2023

Turk Ekonomi Bankasi (TEB), a unit of BNP Paribas (Paris/BNP), has obtained a 367-day sustainability-linked syndicated loan in two tranches of $79mn and €237mn, the lender said on October 30.

The costs on the “slice that belongs to the biggest contributors in the loan” were released in line with the benchmarks set by Akbank (AKBNK), a unit of Turkish conglomerate Sabanci Holding (SAHOL).

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.

Turkish banks release identical costs in syndicated loan renewals, while some of the lenders, particularly smaller ones, pay higher fees. TEB stresses that some slices have different costs.

In October 2022, TEB rolled its syndicated loan at a 77% rollover rate. The costs on the “slice that belongs to the biggest contributors in the loan” stood at 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.

As things stand, hopes for lower costs are now focused on 2024.

On October 5, TEB said that it had mandated its headquarters to obtain a 367-day syndicated loan in three tranches of USD, EUR and Chinese yuan (CNY).

However, a yuan tranche was not reported in the filing for the final deal.

In 2021Denizbanka unit of Emirates NBD, obtained the first ever syndicated loan with a yuan tranche seen in the Turkish banking industry. In 2022 and 2023, it rolled the loan with another yuan tranche.

In 2022, government-run Turk Eximbank obtained its first syndicated loan with a yuan tranche. In 2023, it rolled the loan while keeping the yuan tranche in place.

Turkey has a huge trade deficit with China, which jumped to a record high of $38bn in 2022 from $29bn in 2021.

Separately, TEB said on October 21 that it had decided to recall its €125mn subordinated (Basel III-compliant Tier IIsukuk paper, sold in 2018 at a maturity of 10 years and callable on December 27, 2023.

Chart: TEB’s wholesale funding composition as of end-September.

In line with local peers, TEB, the 11th largest bank in Turkey with Turkish lira (TRY) 333bn ($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.

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).

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.

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%.

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 TEB $330 120% 367-day $79 SOFR+3.50% €237 Euribor+3.25%
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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