Turkey’s Bank Asya Receives US$325 Mln Islamic loan

Turkish lender Asya Katilim Bankasi (Bank Asya) has secured a $325 million dual-currency syndicated Islamic loan, a statement from Emirates NBD, one of the arranging banks, said on Tuesday.

Late last year, the lender, which offers non-interest banking services adhering to Islamic law, postponed a foray into debt capital markets by delaying a sukuk issue worth up to $300 million.

The syndicated loan comprises a $201 million tranche and a 96.5 million euro segment, and is structured as a murabaha facility.

Under a murabaha structure, a financial institution agrees to purchase merchandise for a client and the client promises to buy it from the institution at an agreed mark-up.

Along with Dubai’s Emirates NBD, ABC Islamic Bank, National Bank of Abu Dhabi, Noor Islamic Bank, and Standard Chartered acted as initial mandated lead arrangers and bookrunners on the deal, in which 28 banks participated, the statement said.

The facility carries a profit rate of 200 basis points over the relevant benchmark, and proceeds will be used to expand the bank’s financing activities in Turkey, the statement added.

The potential to develop Turkey’s nascent Islamic finance market is attracting increasing attention, especially from global and regional banks sensing new business opportunities. Separately on Tuesday, Deputy Prime Minister Ali Babacan said Turkey should participate in the Islamic bond market, saying that treasury sukuk issues would pave the way for private sector issues, Reuters reported.