Astaldi-led Builders Get $5 Billion in Biggest Turkey Loan Deal

A group of builders led by Italy’s Astaldi SpA signed the largest construction financing package in Turkey’s history to refinance existing loans and provide new funding for a $6.4 billion toll road.

Astaldi and its Turkish partners Nurol Insaat, Makyol Insaat and Ozaltin Insaat agreed to the $5 billion loan deal with nine lenders, including Deutsche Bank AG, for the 400 kilometer (250 miles) road and suspension bridge across the Sea of Marmara, the Rome-based builder said in a public filing on Monday. The loan is the largest for a project in Turkey, according to data compiled by Bloomberg.

The announcement came a day after parliamentary elections in Turkey ended the single-party rule of Justice and Development Party, or AK Party, and unsettled the markets. Turkey’s lira weakened to a record low and stocks plunged the most in two weeks.

The other lenders are Turkey’s Turkiye Halk Bankasi AS, Akbank TAS, Turkiye Garanti Bankasi AS, Finansbank AS, Turkiye Is Bankasi AS, Turkiye Vakiflar Bankasi TAO, TC Ziraat Bankasi AS and Yapi Kredi Bankasi AS, Astaldi said.

The builder didn’t provide details on the terms of the loan. Gokhan Akmut, chief financial officer of Ozaltin Insaat, said in an interview on March 16 that the package will refinance $2 billion of loans secured for the first phase of the project and use the remainder for the second phase.

Rates Reduced

The cost of borrowing would fall to 475 basis points over the London Interbank Offered Rate, compared with 580 basis on the previous loans, Akmut said. The borrowing will have a maturity of 15 years with a grace period of four years, he said, compared with seven years in the previous deals. A basis point is the equivalent of 0.01 percentage point.

“With this operation, the entire work’s financing process is now complete,” Astaldi said in the statement.

The government included the project in its debt assumption plan last year that offers guarantees from the Treasury. It has also offered minimum traffic guarantees for the road network.

The project was awarded to the consortium in 2009 and comprises 421 kilometers of roads, including the three-kilometer bridge, being built by companies including Japan’s Itochu Corp. and IHI Corp. It will cut the commute from Istanbul to Izmir to four hours from more than eight, Astaldi said.

The first phase from Istanbul to the city of Bursa, including the bridge, will open in January, Akmut said.

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