Turkish banks are learning that all good things come to an end. After piling on corporate loans only a few years ago, lenders are now facing a surge in demand from companies seeking to reorganize debt repayments.
The rise in restructurings threatens to spur an increase in unpaid loans as a plunge in the nation’s currency causes the cost of corporate Turkey’s foreign-currency debt -- equal to about 40 percent of economic output -- to surge. An interest-rate increase to try and stem the lira’s decline is also pushing up borrowing costs as the country’s biggest businesses seek to rearrange almost $20 billion of loans.
