Turkish state lender VakıfBank secures $855M syndicated loan

Published 22.11.2018 22:39
Updated 24.11.2018 00:01

Turkey's state lender VakıfBank on Wednesday announced that it has secured a multicurrency syndicated loan equivalent to $855 million in a transaction that, in spite of challenging global market conditions, once again demonstrated the reputation of Turkey and the credibility of its banking sector in the eyes of international investors.

The loan agreement comprising of $252 million and 528.5 million euros was inked with the participation of 20 banks from 12 countries.

The amount of loan equivalent to $122 million and 528.5 million euros has a tenor of 367 days, whereas the amount of $130 million has a 2-year-tenor, according to a statement by the bank on the Public Disclosure Platform (KAP).

The cost of the trench amounting to $130 million, which has two years tenor, is 3.5 percentage points above Libor, whereas for the $122 million and 528.5 million euros tranches, which both have a 367 day tenor, is 2.75 percent above the Libor rate and 2.65 percent above the Euribor rate, respectively, the statement said.

Thus, the renewal ratio of the transaction to be used in the financing of foreign trade was 100 percent, while the agent and coordinator bank of the transaction was Emirates NBD.

With the said agreement, VakıfBank has renewed the second syndicated loan of the year, despite increasing concerns and challenging market conditions in developing countries, the bank's General Manager Mehmet Emin Özcan said.

The total syndicated loan balance has reached $2.1 billion, together with the first transaction of the year in April, Özcan said. "This amount corresponds to 111 percent renewal rate compared to our total balance of last year. Thus, we reached the highest rate among the major banks that made two syndications in a year. I would like to once again express my gratitude to our partner lender banks from all regions, including the U.S., Continental Europe, the U.K., the Far East and the Middle East, which supported the process," he said.

VakıfBank in April signed the largest syndication loan agreement in its history amounting to $1.3 billion in total with the participation of 35 banks from 17 countries. Meanwhile, in late September and October, two other major Turkish banks, Akbank and Yapı Kredi also managed to secure syndicated loans.

Turkey's fifth-largest bank by assets, Akbank, managed to borrow $980 million from 23 banks operating in 11 countries with a one-year maturity period. One of the country's largest private banks, Yapı Kredi, inked an agreement for a syndicated loan of $1.1 billion from 27 institutions from 13 countries with a maturity period of 367 days.

On the other hand, the Asian Infrastructure Investment Bank (AIIB) also provided $200 million in loans for the Industrial Development Bank of Turkey (TSKB). The Turkish bank will provide long-term financing for renewable energy and energy-efficient projects.

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