LONDON, Sept 4 (LPC) - Turkey’s Akbank and Turk Eximbank have increased pricing on two syndicated loans to encourage international lenders to join the deals, banking sources said on Tuesday, as Turkey’s financial crisis shows no sign of abating.
The two loans were launched in early August, but were put on hold as international lenders assessed the impact of a 40% depreciation of the lira on Turkey’s banking sector.
Pricing has been increased on a US$930m loan for Akbank and a US$350m loan for Turk Eximbank to around 200bp for one-year tranches and around 300bp for two-year tranches, bankers said.
“Pricing on Akbank’s loan has increased following discussions with lead banks and feedback from the wider banking group,” a senior banker said.
Turkey’s banks have to refinance US$6.4bn of syndicated loans before the end of the year, according to LPC data, as the country’s firms face an uphill struggle to repay foreign currency debt.
Fitch cut its outlook for economic growth in Turkey on Tuesday and warned of “significant and widespread downside risks” as the currency crisis hits economic activity.
Pricing on Akbank’s US$930m loan has been increased to 200bp for dollars and 190bp for euros on a one-year loan, and to 290bp for dollars and 240bp for euros on a two-year loan.
A further pricing increase of 25bp is also included if Akbank is rated B/B2 or lower.
Bank of America Merrill Lynch, ICBC and Standard Chartered are leading the deal, which has to be refinanced before the existing loan matures on September 27.
Akbank was not immediately available for comment.
This is the second price increase for the loan, which was priced at around 150bp-160bp when it was launched in early August, up from 130bp on a US$1.24bn equivalent deal which closed in March.
Akbank’s new loan also includes a provision that states that no lender can hold more than 8.5% of the loan to avoid banks making large commitments and ensure a balanced syndicate with equal voting rights, bankers said.
“It’s anything to try and make people feel more comfortable,” a second senior banker said.
Pricing has also been increased on a US$350m loan for Turk Exibank, which is being coordinated by Mizuho.
A one-year tranche now pays 195bp for dollars and 185bp for euros, and a two-year tranche now pays 300bp for dollars and 290bp for euros.
Turk Eximbank was not immediately available for comment.
It remains to be seen whether the pricing increases will be sufficient to encourage international banks to join the deals. Lenders are seeking approvals from credit committees.
Turkey’s five-year sovereign credit default swap rates were 574bp on Tuesday.
“They are hoping that the new pricing will unlock some liquidity now that Turkey is quieter. It will be interesting to see what (international) banks will support,” the second senior banker said.
Additional reporting by Sandrine Bradley; Editing by Christopher Mangham