International banks rush to lend Akbank 1 billion euros
The first tranche of the loan, worth approximately 780 million euros, has a one-year maturity at London Interbank Offered Rate (LIBOR)/Euro Interbank Offered Rate (Euribor) plus 130 basis points, whereas the second tranche worth around 220 million euros has a two-year maturity at LIBOR/Euribor plus 175 basis points.
The loan was announced and the deal was signed in İstanbul on Wednesday, followed by a press conference. Akbank CEO Ziya Akkurt spoke during the signing of the syndicated loan to say that they had secured loans exceeding $1 billion each in the past five months from foreign lenders, noting that it reflected the strength of the Turkish banking system and its prestige in the international arena.
Akkurt said the new loan, which was borrowed from 52 banks in 19 countries under the coordination of WestLB, would be used to fuel Turkey’s economic growth.
The coordinator of the syndicated loan, the director of WestLB, David Pepper, on the other hand, said the loan was a reflection of the strong and deep-rooted international investor basis that Akbank has attained with its successful activities over the years. The success of this operation is at the same time a proof of Akbank’s reputation as a result of its healthy and cautious administration, he said.
Akkurt doesn’t expect election economy
After the ceremony Akkurt answered questions from reporters on recent developments in the economy. He expressed confidence that the Turkish government would not deviate from its commitment to fiscal discipline and the major course of its economic policies ahead of general elections due next year. “As a banker, I am not worried. I do not believe there will be a major shift off course in economic policy, which has been proved very strict and resilient since 2002. Moreover, political risks would be huge in the event of such a departure,” Akkurt told reporters.
The banker also played down a deferral in the implementation of the long-awaited fiscal rule, which aims to bring about long-term fiscal stability pertaining to budget deficits at 1 percent in a decade while setting an annual gross domestic product (GDP) growth target of 5 percent, wouldn’t cause a major bump on the economy. The fiscal rule also sets a target of lowering the debt over GDP to 30 percent in five to10 years. In 2009, the deficit stood at 5.5 percent of GDP and debt at 45.5 percent.
“It is not the end of the world, anyway. Yet it would be better if we had [the fiscal rule]. Turkey will continue to proceed on its path. The credit rating upgrades and economic performance Turkey has achieved thus far have been without a fiscal rule,” Akkurt said.
Government officials have announced the fiscal rule would not be implemented until 2012, with the Turkish finance minister giving assurances that the delay would not give way to a spending spree to upset plans to reduce budget deficit.