September 27, 2018 / 9:22 AM / 8 months ago

UPDATE 1-Turkey's Akbank secures $980 mln syndicated loan, but pricing jumps

(Recasts, adds details, stock price)

By Ebru Tuncay

ISTANBUL, Sept 27 (Reuters) - Turkey’s Akbank secured a $980 million syndicated one-year loan on Thursday, agreeing to double the premium paid on a similar loan in March and reflecting the rising risk burden for banks in the currency crisis.

The financing for Akbank, Turkey’s fifth-largest bank by assets, has been closely watched by investors, given widespread concern about banks’ ability to ride out the lira crisis. The currency has fallen 40 percent this year, sparking worries about a rise in non-performing loans and lenders’ ability to roll over their debt.

Turkish banks traditionally agree two loans each year, in spring and in autumn. Akbank’s refinancing normally closes in August and sets a pricing benchmark for other banks to follow. But this year, the refinancing round appeared to have been delayed as international lenders assessed the impact of the currency sell-off, bankers have said.

Akbank secured a multi-syndicated loan in dollars and euros with a 367-day maturity, it said in a statement. Of that, $285 million was in dollars at an annual cost of 2.75 percent points above libor. The remainder was made up of 591 million euros at a cost of 2.65 percentage points above euribor, it said.

That premium is just above double what it paid for a similar loan in March, when it paid 1.3 percent above libor and 1.2 percent above euribor.

Given their reliance on external funding, Turkish banks are exposed to refinancing risk. Ratings agency Fitch has that some $102 billion of loans are maturing in the next 12 months, and that the refinancing requirement is probably around $55 billion.

The government has said it does not expect problems in the banking sector and the government has dismissed concerns about refinancing risks. Investors are less certain. Istanbul’s index of bank stocks is down 40 percent this year.

Shares of Akbank rose 0.45 percent by 0913 GMT, compared to a flat banking index. (Reporting by Ebru Tuncay; Writing by Daren Butler; Editing by David Dolan)

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