Turkish banks may have to pay up once again as they rush to meet $6 billion of financing deadlines amid the country’s worst economic crisis in years.
At least nine lenders have to complete annual dollar loan syndications by yearend, leaving an industry heavily reliant on overseas funding little time and few options to conclude deals often involving dozens of global banks, Bloomberg reported.
Akbank Turk AS, Turkiye Is Bankasi AS and state - owned Export Credit Bank of Turkey are at the head of the queue, as they are yet to finalize deals that entered syndication in July, days before the nation’s crisis began.
“The situation is definitely worse than other crises that Turkey has been through, ” said Reza Karim, a London - based credit analyst at Jupiter Asset Management. “Pricing will certainly have to be changed. ”
The Turkish bank loans will provide a key test of the nation’s ability to tap overseas debt markets amid US sanctions that have cooled the economy, driven the lira to record lows and pushed yields on sovereign bonds maturing in March to about 9%. Local crises have previously forced pricing concessions by Turkish banks, which have borrowed at least once or twice a year from the same pool of overseas lenders for decades.
“We expect loan pricings to go up, ” said Okan Akin, a London - based credit analyst with AllianceBernstein. “It’s only logical that every Turkish asset would have to be repriced reflecting new market realities. ”
The nation’s banks traditionally get dollar loans because rates are lower than in the lira market. Local companies borrowing these funds then face a currency risk as they have to use lira revenues to repay dollar debt.
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