Turkey’s Biggest Unpaid Loan Tells Story of Lira’s Weakness
- Turk Telekom parent missed Sept. payment on record $4.75b loan
- Turkish companies’ $201b net FX shortfall is almost 30% of GDP
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When the owner of Turkey’s biggest phone company received the nation’s largest-ever loan in 2013, it trumpeted the deal as so "hugely oversubscribed" that banks had to lend less than they wanted. Three years later, a missed payment may leave those banks grateful they were cut off.
Since the $4.75 billion package was extended to Ojer Telekom, the parent of Turk Telekom AS, the lira has lost about 40 percent against the dollar, eroding the value of dividends that Ojer depended on for repayment. Last month, the company sought an extension, missing an installment of about $290 million owed to 29 banks including Citigroup Inc., JPMorgan Chase & Co., Deutsche Bank AG, and all of Turkey’s largest lenders.