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CEE & Turkey

Turkiye Garanti Bankasi signs dual-currency loan

Turkiye Garanti Bankasi recently signed a benchmark sized dual currency loan deal with a syndication of international banks. The transaction highlights not only the interest of foreign entities in the Turkish debt space, but increased interest form Turkish entities in tapping international markets.

May 4, 2016 // 2:19PM

The banks that participated on Turkiye Garanti Bankasi’s most recent loan have also taken part in previous syndications with the bank. 19 banks participated as lead arrangers.

“42 banks from 15 countries participated in the syndication. The majority of the lenders were based in Germany and the US, although there was also participation from banks in the UK, Austria, France, Canada, Japan, and in a first for Turkiye Garanti Bankasi, a Korean bank also took part,” said Gencay Gebik, Supervisor of Structured Finance at Turkiye Garanti Bankasi, who worked on the transaction.

She added that the wide variety of banks that took part in the loan agreement demonstrates the great diversity that the bank is able to achieve.

Tighter liquidity in Turkey’s domestic market has led to the increased participation of Turkish entities on the international arena.

However, Gebik noted that the bank participated in an international loan syndication as it wanted to maintain its relationship with the various banks involved on the transaction.

The size of the dual currency loan was around €1.25bn (US$1.44bn). The tenor of the credit line is 367 days.

“The proceeds of the loan will be used to refinance a previous year-long credit line that was signed in April 2015,” said Gebik.

The loan was made up of two tranches split between euros and dollars. The euro tranche amounted to €814,625mn, whilst the dollar section constituted US$479,325mn.

Gebik noted that the euro tranche was priced at 75bp over EURIBOR, and the dollar tranche was priced at 85bp over the same benchmark.

She added that the bank settled on euro and dollar tranches as it allowed for increased flexibility when operating with the lending banks, as they were able to lend in whichever currency was more convenient for them.

Gebik added that Turkiye Garanti Bankasi’s financial standing and exposure to either currency did not factor on the denominations which made up the loan.

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