Turkish banks and companies have achieved significant success by securing nearly $6.91 billion (TL 47 billion) in international financing during the period when the coronavirus pandemic has halted economic activity and severely affected the global economic system and financial markets.
The financing enabled the institutions to easily overcome the financial difficulties of April and May when debt returns are the most intense.
Turkish banks, including Akbank, Ziraat Bank, VakıfBank, QNB Finansbank, Yapı Kredi Bank, Türk Eximbank, Garanti BBVA and Iş Bank, and confectionery giant Ülker Bisküvi secured a syndicated loan of $6.3 billion in April and May, marked by difficult market conditions due to the outbreak. The banks have also managed to secure nearly $600.6 million in non-syndicated financing from several international organizations, including the European Bank for Reconstruction and Development (EBRD).
The institutions in question thus achieved a 91% syndicated loan renewal rate in the last two months, given the $9.93 billion syndicated loan used in 2019.
In addition, borrowing costs during this period were also 25 basis points lower in the dollar and 40 basis points lower in the euro than last year. The cost of syndicated loans was "Libor + 2.25%" in dollars and "Euribor + 2%" in euro.
Private lender Akbank was first to secure a syndicated loan renewal, having renewed 86% of last year's $700 million loan by securing a $605 million syndicated one-year loan on April 1-8.
The public lender Ziraat Bank managed to renew 75% of the $1.42 billion of last year's syndicated loan by securing $1.06 billion on April 9.
Another public lender VakıfBank renewed 88% of last year's $1.09 billion by securing a $950 million syndicated loan on April 29.
QNB Finansbank, whose syndicated loan stood at $200 million last year, on May 14 mobilized $225 million from international lenders, posting a 128% loan renewal rate.
Also, another private lender, Yapı Kredi, reached an 84% loan renewal rate as it secured $870 million between May 15-27 from last year's $1.03 billion.
Having used a $407 million syndicated loan last year, Türk Eximbank received a syndication loan worth $723 million on May 14-29 amid coronavirus' economic fallout. The institution thus managed to post a record loan renewal rate of 178%.
Garanti BBVA on May 20 secured a $594 million syndicated loan, renewing 79% of last year's $755 million. Having used a $950 million loan last year, Iş Bank managed to mobilize a $792 million syndicated loan on May 21, reaching a loan renewal rate of 83%.
The leading biscuit maker in Turkey, Ülker Bisküvi, overcame global market turbulence by also securing international funding to continue smooth operations.
It secured a total of $455 million from eight lenders on April 2 despite market volatility. The loan consisted of a syndicated facility of $374 million and a parallel loan of 75 million euros ($81 million) provided by the EBRD. The company, therefore, renewed 121% of the last year's loan.
One of Turkey's best-known confectionery, Ülker produces biscuits, cakes, wafers, chocolate bars and chocolate-covered biscuits. It sells products throughout Turkey and exports to Europe, North America, Africa, Asia and the Middle East.
The EBRD is a major investor in Turkey. Since 2009 it has invested almost 12 billion euros in various sectors of the country's economy, with almost all investments in the private sector.
In the period when global economies stalled, five Turkish banks managed to also receive non-syndicated financing worth $600.6 million from various international institutions, primarily the EBRD.
Denizbank, QNB Finansabnk, Garanti BBVA, Yapı Kredi and Türk Eximbank received $175 million, $136 million, $104.6 million, $100 million and $85 million, respectively, in May.
