Turkey's Akbank (AKBNK) obtained a $700mn sustainability-linked syndicated loan in five tranches, the lender said on March 26.

(Story chart: Turkish corporates’ external debt rollover rates.)

The loan's two 367-day tranches are worth $125mn and €175mn, while its two-year and two-day tranches are worth $202mn and €60mn. The three-year and two-day tranche stands at $103mn.

Forty seven banks from 18 countries, including 10 newcomers, placed $1.17bn worth of combined bids for the facility. The two-year and three-year tranches are sustainability-linked.

The debt markets continue to gauge impacts, and likely impacts down the road, from the armed conflict in the Middle East.

Spreads fall further

The cost of the 367-day USD-tranche stood at the guaranteed overnight financing rate (SOFR) plus 125bp while the cost of the 367-day EUR-tranche was the euro interbank offered rate (Euribor) plus 110bp.

The costs of the two-year tranches, meanwhile, stood at SOFR+1.75% and Euribor+1.60%. The cost of the three-year tranche was released as SOFR+2.00%.

The benefits of Turkey’s so-called economic normalisation policy applied since June 2023 have clearly been observed in external debt rollovers. Since the new policy was brought in, the spreads on the 367-day tranches have fallen by 300bp while two-year and three-year tranches have re-emerged.

Lowest since 2016

The 125-bp spread on the 367-day USD-tranche is the lowest seen since the 85bp that was obtained in October 2016. It is also 25bp lower compared to October and 35bp lower compared to April 2025 (See full list here).

The spreads on the 2-year and 3-year USD tranches were lower by 15bp compared to October and by 25bp compared to a year ago.

The spread on the 367-day EUR tranche was lower by 15bp compared to October and by 25bp compared to April 2025 while the spread on the 2-year tranche was lower by 5bp and 10bp, respectively.

136% rollover rate

In April 2025, Akbank rolled its loan at a renewal rate of 125%. The costs of the 367-day tranches were released at SOFR+1.60% and Euribor+1.35% while the two-year costs stood at SOFR+2.00% and Euribor+1.75%. The three-year costs came at SOFR+2.25% and Euribor+2.00%.

The 367-day tranches were worth $230mn and €244mn. As a result, the currency-adjusted renewal rate of the latest loan stood at 136%.

Ratings pushed up further

In line with local peers, Akbank has a BB-/Positive rating from Fitch Ratings and a Ba3/Stable from Moody’s Investors Service.

Loans rolled twice a year

Akbank has another syndicated loan. In October, Akbank rolled this loan at a renewal rate of 114% and at costs of SOFR+1.50% and Euribor+1.25% for the 367-day tranches. The spreads on the 2-year tranches came in at 190bp for USD and 165bp for EUR while the spreads on the 3-year USD tranche stood at 215bp.

Turkish banks roll their syndicated loans twice a year, with one season in spring (April-July) and the other in the autumn (October-November).

Akbank launches both seasons by setting the Turkey benchmark for the interest rates. All leading banks release identical costs, while some of the lenders, particularly the smaller ones, pay higher fees.

Central bank chart: Top 10 Turkish banks’ combined syndicated loan renewal rates and costs.

Spring 2026 season

In this spring season, a total of 12 banks will roll over a combined sum of $5-7bn as longer-term tranches re-emerged in the autumn season of 2024 and only 367-day tranches will be rolled over in the spring season of this year.

The exact sum is not available since Turk Eximbank and Ziraat Bank did not provide the figures of their tranches in the spring season of 2025.

Autumn 2025 season

In the autumn season of 2025, a total of nine banks were to roll over a total of 10 facilities (including two loans by Denizbank) with a combined sum of $6bn as longer-term tranches re-emerged in the autumn season of 2024 and only 367-day tranches were to be rolled over.

On October 27, Akbank (AKBNK) launched the season at lower costs. All spreads fell by 10bp compared to the autumn season while the spreads on the USD tranches declined by 25bp compared to last year while the EUR spreads fell by 35bp.

Denizbank and Turk Eximbank did not announce the rollover of their loans while Ziraat Bank announced a new loan.

By the end of the season, nine banks announced $7bn worth of loans in total, suggesting a combined rollover rate that came in at higher than 100%.

Setting benchmarks for Turkish borrowers

The share of syndicated loans in the external funding composition of Turkey and Turkish banks has declined in recent years. Turkey rolls over a combined sum of around $200bn each year.

Despite the lower share in the composition, the banks’ syndicated loan renewals are a good indicator when tracking developments in the sustainability of Turkey’s external debt burden.

They share exact maturities and costs, setting benchmarks.