Vakıfbank borrows less in syndicated loan market

Vakıfbank, a Turkish state-run lender, borrowed $950 million from international banks via a syndicated loan in dollars and euros, less than it did a year ago, Dunya newspaper reported on Wednesday.

The company secured the borrowing from 33 banks via arrangers Emirates NBD and Abu Dhabi Commercial Bank in two tranches of $312 million and 589.5 million euros. The size of the borrowing was less than the $1.1 billion secured in April last year, equating to a so-called roll-over ratio of 86 percent.

Turkish banks are refinancing part of their existing debt during the coronavirus crisis, but at lower rates of interest. The Turkish authorities are calling on the banks to lend more to support the economy and have introduced financial penalties should they fail to do so.

The financing cost 2.25 percentage points more than the benchmark Libor interest rate for the dollar loan and 2 percentage points above Euribor for the euro portion, Vakıfbank said.

Vakıfbank paid more to secure the $1.1 billion in financing last year – the dollar borrowing cost 2.5 percentage points above Libor and the euro portion 2.4 percentage points over Euribor.