Akbank slips in with loan days before shock rate cut

Published: October 25, 2021

Top tier Turkish lender Akbank slashed the margin on its US$700mn-equivalent sustainability-linked loan refinancing, days before the Turkish central bank sent markets reeling by slashing rates by 200bp.

In late October, Akbank signed a US$460mn and €206.8mn 367 day term loan facility. The funds will be used for general trade finance purposes.

The dollar tranche priced at 215bp over Libor, while the euro portion came in at 175bp over Euribor. This equals a 35bp and 50bp decrease, respectively, from the one year and one day deal that was refinanced. 

“Although our new syndicated loan received around US$900 million of demand,” said Hakan Binbaşgil, Akbank’s chief financial officer, “we renewed it as US$700 million in line with the needs of our bank”.

Seven new banks joined the 36-bank strong deal, with five new countries represented among the wide-ranging lending syndicate including the UAE, Qatar, Kuwait, India and Switzerland.

The trade is linked to sustainability targets, meaning the margins on the loan will step up or down based on whether the bank manages to hit targets on female employee representation, reduced lending to greenfield coal power projects and increasing the use of renewable energy within Akbank.

Akbank is gradually increasing the amount of environmental, social and governance-related financing in its capital structure.

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