ING Turkey, a unit of ING Bank (Amsterdam/INGA), has obtained €332mn worth of a 367-day syndicated loan, according to a statement by ING Turkey.

A total of 26 banks from 14 different countries participated in the facility. Emirates NBD Capital Ltd acted as co-ordinator, while ING Bank (Amsterdam/INGA) acted as sustainability co-ordinator.

The renewal rate stood at 112%. In July 2022, a €300mn syndicated loan was renewed with a roll-over ratio of 100%.

Costs were in line with the benchmarks set by Akbank (AKBNK), the big-cap unit of Turkish conglomerate Sabanci Holding (SAHOL).

The cost of the US dollar tranche stood at the guaranteed overnight financing rate (SOFR) plus 425bp, while the cost of the euro tranche was the euro interbank offered rate (Euribor) plus 400bp.

The loan is to be used for international trade finance, while the sustainability criteria include commitments to provide sustainability-linked loans to finance green building certifications and to provide sustainability training to the personnel.

In line with local peers, ING, the 13th largest bank in Turkey, with TRY109bn ($4bn) of assets at end-March, has a B-/Negative (one notch below Turkey’s sovereign rating and six notches below investment grade) from Fitch Ratings.

Turkish banks conduct 367-day – a ‘trick’ maturity for registering loans as long-term that uses two extra days – syndicated loan renewal seasons twice a year, with one season in spring (April-July) and the other in autumn (October-November).

Turkish banks release identical costs in syndicated loan renewals, while some of the lenders, particularly smaller ones, pay higher fees.

Across recent years, Akbank has set the Turkey benchmark for the interest rates each season. In April 2022 and 2023, Ziraat Bank launched the spring seasons. However, Ziraat could not provide the costs this year. It awaited Akbank’s released costs to provide its costs.

In the autumn refinancing season of 2022 nine Turkish banks renewed an exchange rate-adjusted combined sum of $5.6bn, obtaining $4.3bn worth of fresh loans. The rollover rate stood at 77%.

The private banks’ renewal rates were very low, at 60-70%, while the spreads were at record-high levels. QNB Finansbank registered the highest rollover rate of 104%. Government-run banks registered 90-100% rates.

The all-in costs were in line with the benchmarks set by Akbank (AKBNK), namely SOFR+4.25% for the USD tranche and Euribor+4.00% for the EUR tranche (see full list below).

In the spring season of 2022 11 banks renewed $8bn of loans at a combined renewal rate of 92% with borrowing amounting to $7bn in total. The costs stood at SOFR+2.75% and Euribor+2.10%. In spring 2021, the costs stood at Libor + 2.50% and Euribor + 2.25%.

In the spring season of this year, 11 banks are due to renew a combined sum of $7bn. And in the autumn season nine banks are to roll over a combined sum of $4bn.

In July, Industrial Development Bank of Turkey (TSKB) is due to conclude the season with renewing a $109mn loan.

The share of syndicated loans in Turkey’s and Turkish banks’ external funding composition has declined in recent years. Turkey rolls over a combined sum of around $150-200bn each year.

Benchmarks remain painfully high as SOFR persists above the 5%-level, compared with the 0.05% seen in October 2021, while 12-month Euribor has surpassed the 4%-level, compared with the minus 0.5% recorded in October 2021.

In June, SOFR is due to replace the current US dollar benchmark London Interbank Offered Rate (Libor). One-year Libor currently stands at over 5%.

Recently, all the benchmarks have been on the rise in parallel with the global monetary tightening trend, which is expected to be reversed this year.