Turkey’s Vakifbank Seeks One-Year Loan to Refinance Debt

Turkiye Vakiflar Bankasi TAO (VAKBN), a state-run bank, is seeking a one-year loan to refinance debt maturing next month at lower costs.

The Turkish lender is proposing to pay 135 basis points above a benchmark lending rate --85 basis points in interest margin and 50 basis points in fees -for the loan, according to data compiled by Bloomberg. The bank refinanced a one-year syndicated loan split into $145 million and 433 million euros ($531.4 million) at one percentage point over international benchmarks in September.

Vakifbank paid 145 basis points above international benchmarks for a $152 million and 586.7 million-euro one-year syndicated loan in April, according to data compiled by Bloomberg.

Moody’s Investors Service raised the foreign-currency debt grade of Vakifbank, along with four other Turkish banks, by two levels to an investment-grade rating of Baa2 on July 4. The upgrade of Turkey’s sovereign rating to one step below investment grade on June 20 had “credit positive effects on ratings of various banks,” Moody’s analysts Arif Bekiroglu and Carola Schuler said in a statement at the time.

Vakifbank rose 1.3 percent to 3.96 liras at 5:16 p.m. in Istanbul, the highest on a closing basis since May 2011.

To contact the reporters on this story: Patricia Kuo in London at pkuo2@bloomberg.net; Sibel Akbay in Istanbul at sakbay@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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