Tupras Signed $2.1 Billion Loan Accord With 10 Banks

Tupras Turkiye Petrol Rafinerileri AS (TUPRS), Turkey’s sole oil refiner, got a $2.1 billion loan from 10 banks to finance a refinery upgrade that will cut the country’s current account deficit by $1 billion a year, the company said.

A $1.1 billion, 12-year portion of the loan, guaranteed by Spain’s export credit agency CESCE, will cost a total of 305 basis points over international benchmark rates, Tupras said in a statement to the Istanbul Stock Exchange today. A $624.3 million portion of the loan, guaranteed by Italy’s SACE SpA, will cost 310 basis points over benchmarks. The remaining $359 million seven-year facility was secured at 285 basis points over benchmarks, Tupras said.

Tupras, owned by Koc Holding AS (KCHOL), will produce an additional 3.5 million metric tons of gasoline and diesel annually after the $2.38 billion project is completed by the end of 2014, it said in an e-mailed statement.

The $2.1 billion loan was obtained from banks including Banco Bilbao Vizcaya Argentaria SA (BBVA), Bank of Tokyo-Mitsubishi Ufj Ltd., BNP Paribas (BNP) SA and Credit Agricole Corporate & Investment Bank, according to the statement. The loan has a grace period of four years and talks are under way to have fixed interest rates on the guaranteed portions, Tupras said.

Tupras fell 1.5 percent to 39.30 liras at 4:13 p.m. in Istanbul, falling for the first day in five.

Spain’s Tecnicas Reunidas SA (TRE) is carrying out the refinery upgrade and payments will be made over 3 1/2 years, Tupras said. The project is aimed at meeting growing demand for cleaner fuels, the company said on July 22.

To contact the reporter on this story: Aydan Eksin in Istanbul at aeksin@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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