October 8, 2018 / 1:27 PM / 2 months ago

UPDATE 1-Turkey banks group calls for restructuring of some short-term corporate debt

(Adds TBB chairman comments, background, details)

ISTANBUL, Oct 8 (Reuters) - Turkey’s banking lobby called on its members on Monday to allow corporate borrowers to restructure some short-term loans, a move that would potentially throw a lifeline to debt-burdened companies hit by the country’s currency crisis.

The TBB banks association said lenders should restructure some loans maturing before April 30 that are held by businesses with less than 15 million lira ($4 million) of debt. The restructuring should be up to 24 months and allow for up to six months of non-payment of the loan principal, it said.

Roughly a quarter of all outstanding loans by Turkish banks could be restructured under the recommendation, TBB Chairman Huseyin Aydin told broadcaster NTV. He said he did not see an urgent need for capital in the sector.

Investors are particularly concerned about Turkey’s banks after the lira tumbled around 40 percent this year, knocking global financial markets and putting Turkey’s economic woes in sharp focus.

Turkey has already seen a number of high-profile restructurings this year with Yildiz Holding, the owner of global food brands including Godiva chocolate, agreeing to refinance $5.5 billion in May.

The government has said it does not expect problems in the banking sector and has dismissed concerns about refinancing risks. Investors however, are concerned. Istanbul’s index of bank stocks is down nearly 40 percent this year. ($1 = 6.1723 liras) (Reporting by Ali Kucukgocmen and Daren Butler; Editing by David Dolan and Susan Fenton)

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