FRONT STORY EUROPEAN MARKETS
Turkish banks face refi test
Political volatility and a weakened lira have hit economy
Akbank set to kick-start next round of bank loans in August
Turkish bank borrowers could face
DIFlCULTYûINûRAISINGûTHEûNEXTûROUNDûOFû
BIANNUALûSYNDICATEDûLOANSûFROMû
INTERNATIONALûLENDERS ûASûPOLITICALûVOLATILITYû
ANDûAûCHRONICûWEAKENINGûOFûTHEûLIRAû
CONTINUEûTOûUNDERMINEûTHEû4URKISHû
ECONOMY
4HEûDEPRECIATIONûOFûTHEûLIRAûHASûCREATEDû
MASSIVEûPROBLEMSûFORû4URKISHûBORROWERSû
TRYINGûTOûSERVICEûFOREIGNûCURRENCY
DENOMINATEDûDEBT ûLEAVINGûBILLIONSûOFû
DOLLARSûANDûEUROSûOFû4URKISHûCORPORATEûDEBTû
SITTINGûONûBANKSûLOANûBOOKSûWAITINGûTOûBEû
RESTRUCTURED
)NûADDITIONûTOûTHEûCURRENCYûISSUE ûPOLITICALû
UNCERTAINTYûFOLLOWINGûTHEûRE
ELECTIONûOFû
0RESIDENTû4AYYIPû%RDOGANûANDûTHEû
UNPOPULARûAPPOINTMENTûOFûHISûSON
IN
LAWûASû
lNANCEûMINISTERûISûALSOûHINDERINGû4URKISHû
BANKSûABILITYûTOûRAISEûLOANSûFROMûTHEû
INTERNATIONALûMARKETS
,OANûBANKERSûAREûNOWûPREDICTINGûANû
INCREASEûINûPRICINGûONûTHEûNEXTûROUNDûOFû
THESEûLOANS ûWITHûPOTENTIALLYûSMALLERû
FACILITIESûANDûSOMEû4URKISHûBANKSûEVENû
OPTINGûTOûREPAYûOUTSTANDINGûLOANSûRATHERû
THANûRElNANCINGûTHEM
h4HEREûMAYûBEûAûCOMBINATIONûOFû;4URKISH=û
BANKSûBORROWINGûLESSûASûPRICINGûGOESûUPûANDû
;INTERNATIONAL=ûBANKSûLENDINGûLESSûASû
4URKISHûRISKûINCREASESû4URKISHûBANKSûAREû
VERYûLIQUIDûTHEYûMAYûEVENûLOOKûTOûREPAYû
SOMEûOFûTHEûLOANSûANDûREDUCEûTHEIRû
RElNANCINGûNEEDS vûSAIDûONEûBANKER
GOING DOWN
,ASTûYEARû4URKISHûBANKSûBORROWEDû
53BN ûALMOSTûEXCLUSIVELYûFROMû
INTERNATIONALûBANKSûSOûFARûTHISûYEARûTHEYû
HAVEûRAISEDû53BNûDURINGûTHEûlRSTûROUNDû
OFûTHEûBIANNUALûRElNANCINGûLOANS û
ACCORDINGûTOû4HOMSONû2EUTERSû,0#ûDATA
0RICINGûFORûAKBANKSû53BN
EQUIVALENTûLOANû
ûTHEûlRSTû4URKISHûBANKûLOANû
TOûCLOSEûTHISûYEARûINû-ARCHû
ûSAWûAûBPûFALLûINû
PRICING ûDESPITEûTHEûVOLATILITYûATûTHATûTIMEû
CAUSEDûBYû4URKEYSûMILITARYûOPERATIONûINû
3YRIAûINû*ANUARY
4HEûLOANûCOMPRISEDûAûONE
YEARûFACILITYû
DIVIDEDûBETWEENûAû53MûTRANCHEû!û
ANDûAûõMûTRANCHEû"ûTHATûPAIDûBPû
OVERû,IBORûANDûBPûOVERû%URIBORû
RESPECTIVELY
)TSûONE
YEARûFACILITYûFROMû-ARCHûûPAIDû
BPûOVERû,IBORûANDûBPûOVERû%URIBOR
4HEûMOSTûRECENTûDEALûALSOûINCLUDEDûAû
53MûTWO
YEARûTRANCHEû#ûPAYINGûBPû
OVERû,IBOR
/THERû4URKISHûBANKûBORROWERSûTHATû
FOLLOWEDû!KBANKûTOûTHEûMARKETûBEFOREû*ULYû
ALSOûPAIDûLESS
BANK YAPI KREDIûAGREEDûTWOû
DAYû
TRANCHESûTOTALLINGû53MûANDûõMû
THATûPAIDûBPûOVERû,IBORûANDûBPûOVERû
%URIBORûRESPECTIVELYûANDûTWO
YEARûPLUSûONEû
DAYûTRANCHESûTOTALLINGû53MûANDûõMû
THATûPAIDûBPûOVERû,IBORûANDûBPûOVERû
%URIBORûRESPECTIVELY
4HEûBANKSûLOANûFROMûAûYEARûEARLIERûPAIDû
BPûOVERû,IBORûANDûBPûOVERû%URIBORû
ONûTHEû
DAYûTRANCHESûANDûBPûOVERû
,IBORûANDûBPûOVERû%URIBORûONûTHEûTWO
YEARûPLUSûONEûDAYûTRANCHES
)NûADDITIONûZIRAATSû53BN
EQUIVALENTûLOANûTHATûCLOSEDûINû!PRILûPAIDû
BPûOVERû%URIBOR,IBORûLESSûTHANûITSûLOANû
AGREEDûINû!PRILû
(OWEVERûBYû*ULYûPRICINGûHADûINCREASEDû
TSKBSû53MûLOANûPAIDûBPûOVERû
,IBOR%URIBORûnûBPûMOREûTHANûLASTûYEARSû
LOANû
ûWHILEûING TURKEYûPAIDûBPûMOREûFORû
ITSûõMûLOANûCOMPAREDûWITHûûMONTHSû
EARLIER
,OANûBANKERSûAREûNOWûWAITINGûFORû
!KBANKûTOûKICK
STARTûTHEûSECONDûROUNDûOFû
BIANNUALûlNANCINGSûINû!UGUSTûTOûSEEûWHATû
IMPACTûVOLATILITYûWILLûHAVEûONûLENDERû
APPETITEûFORû4URKISHûRISK
h!ûLOTûOFûPEOPLEûAREûHAVINGûDISCUSSIONSû
AROUNDûTHISûATûTHEûMOMENTû)ûTHINKûYOUûWILLû
DElNITELYûSEEûSOMEûPRICEûUPTICKvûAûSECONDû
BANKERûSAID
ROCKY ROAD
4HEûLIRAûHASûFALLENûASûMUCHûASûûOVERûTHEû
PASTûTHREEûYEARSûANDûCORPORATEû4URKEYûISû
STRUGGLINGûWITHûTHEûREPAYMENTûOFûITSû
FOREIGNûCURRENCYûDEBTû!TûLEASTûTHREEûLARGEû
4URKISHûCORPORATESûAREûINûTALKSûWITHûLOCALû
ANDûINTERNATIONALûBANKSûABOUTûTHEû
RElNANCINGûORûRESTRUCTURINGûOFûAROUNDû
53BNûEQUIVALENTûOFûTHISûDEBT
)Nû!PRILû4URKISHûFOODûGIANTûYILDIZ
RESTRUCTUREDû53BNûOFûITSû53BNûDEBTû
%ARLIERûTHISûMONTHû!KBANKûANDû)SBANKû
APPLIEDûTOûTAKEûOVERûûOFû4URKû4ELEKOMûASû
PARTûOFûAûDEBTûRESTRUCTURINGûAFTERû$UBAI
based OGER TELECOMûWHICHûOWNSûTHEûSTAKEû
FAILEDûTOûKEEPûUPûPAYMENTSûONûAû53BNû
LOANûITûTOOKûOUTûINû
#ONGLOMERATEûDOGUS HOLDING is also in
TALKSûWITHûBANKSûTOûRElNANCEûAROUNDûõBNû
OFûDEBT
7ITHûLOCALûANDûINTERNATIONALûBANKSû
CONTINUINGûTOûHOLDûTHISûDEBTûONûTHEIRûLOANû
BOOKSûAPPETITEûFORûTHEûUPCOMINGûROUNDûOFû
4URKISHûBANKûDEALSûCOULDûBEûCUT
h4HESEû;BANKûLOANS=ûAREûKEYûRELATIONSHIP
DElNINGûDEALSûWHICHûAREûVIEWEDûSEPARATELYû
FROMûCORPORATEû4URKISHûLOANSû4HEYûHAVEû
ALWAYSûCONTINUEDûTHROUGHûALLûSORTSûOFûCRISESû
INCLUDINGûTHEûlNANCIALûCRISISûOFûû
ALTHOUGHûPRICINGûDIDûINCREASEûTOûBPû
THENû"UTûULTIMATELYûTHEûRISKûHASûTOûBEûRIGHTû
FORûCREDITûCOMMITTEESvûTHEûSECONDûBANKERû
SAID
!SûAûRESULTûAûNUMBERûOFûSMALLERû
INTERNATIONALûLENDERSûWILLûHAVEûTOûSTEPûAWAYû
FROMûTHEûLOANSûBANKERSûSAID
h4HEREûMIGHTûBEûAûCHANGEûINûTHEûBANKSû
LENDERûGROUPSûWITHûSMALLERûBANKSûATûTHEû
BOTTOMûOFûTHEûLENDINGûSTRUCTUREûFALLINGû
AWAYûANDûSOMEûOFûTHEûBIGGERûBANKSûTHENû
LENDINGûMOREvûAûTHIRDûBANKERûSAIDû
h,ENDERSûHAVEûTOûBEûMOREûSELECTIVEûANDû
MOREûCHOOSYv
0RESIDENTû%RDOGANûWASûRE
ELECTEDûINTOû
POWERûFOLLOWINGûEARLYûPRESIDENTIALû
ELECTIONSûONû*UNEûûWHICHûDIDûNOTHINGûTOû
CALMûTHEûVOLATILITYûINûTHEûMARKETSûTHATû
BEGANûINû!PRILûTRIGGEREDûBYûEVENTSûTHATû
INCLUDEDûTHEûANNOUNCEMENTûOFûTHEûEARLYû
ELECTIONSûAûCUTûINûTHEûFOREIGNûCURRENCYû
SOVEREIGNûCREDITûRATINGSûBYû-OODYSûANDû
30ûANDûAûSURGEûINûINmATION
(OURSûAFTERûBEINGûSWORNûINûWITHûNEWû
POWERSûASûEXECUTIVEûPRESIDENTûONû*ULYûû
%RDOGANûAPPOINTEDûHISûSON
IN
LAWû"ERATû
!LBAYRAKûTOûTHEûPOSTûOFûTREASURYûANDûlNANCEû
MINISTERû4HISûEXACERBATEDûCONCERNSûTHATû
%RDOGANûWILLûSEEKûTOûEXERCISEûGREATERû
INmUENCEûOVERûMONETARYûPOLICY
Sandrine Bradley
LOANS
China Hong Kong India Japan Singapore Vietnam Austria Germany û Italy û
Oman South Africa UK United States Leveraged Loans û Restructuring