Turkey’s Denizbank renews syndicated loan at 134% rollover rate

By Akin Nazli in Belgrade November 15, 2023

Denizbank, a unit of Emirates NBD, has obtained an $845mn ESG-linked 367-day syndicated loan in tranches of $425mn and €393mn, Denizbank said on November 15.

The costs were released in line with the benchmarks set by Akbank (AKBNK), a unit of Turkish conglomerate Sabanci Holding (SAHOL), at the guaranteed overnight financing rate (SOFR) plus 350bp and the euro interbank offered rate (Euribor) plus 325bp.

A total of 48 banks from 22 countries participated in the syndicated loan. The facility will be used for financing international trade activities.

Emirates NBD Capital Limited, Dubai-based Mashreq PSJC (Mashreqbank), US-based The Commercial Bank (TCB) and Standard Chartered Bank (London/STAN) acted as co-ordinators in the deal, while SMBC (Sumitomo Mitsui Banking Corporation/Tokyo/8316) Nikko was ESG co-ordinator.

The rollover rate stood at 134%. In November 2022, Denizbank obtained a $605mn loan at SOFR+425bp and Euribor+400bp. The renewal rate stood at 78%.

In line with local peers, Denizbank, the ninth largest bank in Turkey with Turkish lira (TRY) 746bn ($27bn) 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: Denizbank’s wholesale funding composition as of end-September.

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, while some of the lenders, particularly smaller ones, pay higher fees.

In recent years, Akbank has set the Turkey benchmark for the interest rates each season. In April 2022 and 2023, government-run 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. The costs are 75bp lower compared to a year ago. The rollover rates have been coming in at above 100%.

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.

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 for 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
Nov-23 Denizbank $845 134% 367-day $425 SOFR+3.50% €393 Euribor+3.25%
Nov-23 Turk Eximbank $658 108% 1-year $79   €496 Chinese yuan 350mn
Nov-23 Yapi Kredi Bank (YKBNK) $755 159% 367-day $359 SOFR+3.50% €373 Euribor+3.25%
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 $136   €404 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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