One of the largest agency-supported multi-tranche syndicated financings arranged for a Turkish borrower to date signed last April. The US$1.6bn financing was for the expansion of Avea’s mobile telecommunications network and was positively received by export credit agencies (ECAs), development finance institutions (DFIs), as well as commercial lenders.

The transaction successfully closed with the involvement of 19 banks and DFIs. It involved a complex deal structure with a project finance-style security package. Tenors spread between eight and nine years, according to the various tranches.

Avea is Turkey’s third largest GSM operator, founded in 2004 from the merger of the two GSM operators Aycell (Turk Telekom) and Aria (a joint venture of AY Bankasi – 51% and TIM – 49%).

The IFC lent US$120mn directly and covered a B loan of US$300mn with participants ABN Amro (US$32mn), BNP Paribas, Dexia Credit Local, Fortis Bank, Bayerische Hypo- und Vereinsbank, Natixis, Rabobank International, Société Générale and WestLB with US$30mn each and Citi with US$28mn.

Italian ECA Sace gave 100% cover for a US$300mn tranche involving lenders KfW (US$40mn), Société Générale (US$34mn) and Citi with US$18mn. ABN Amro (Sace agent), BNP Paribas, Dexia Credit Local, Fortis Bank, Bayerische Hypo- und Vereinsbank, Natixis, Rabobank International and WestLB have all lent US$26mn each.

Swedish insurer EKN is providing 95% cover for a US$173.0846mn tranche, with ABN (EKN agent) lending US$113.5846mn under facility A.

For a B facility of US$59.5mn under EKN cover ABN Amro is lending US$6.7mn and BNP Paribas, Dexia Credit Local, Fortis Bank, Bayerische Hypo- und Vereinsbank, Natixis, Rabobank International, Société Générale and KfW are lending US$6.6mn each.

Canada’s EDC is lending US$100mn, while a DFI facility of €78mn is being provided by the Black Sea Trade and Development Bank (€18mn), DEG (€20mn), FMO (€20mn) and Proparco (€20mn).

There is a commercial bank facility of US$506.910mn, provided by ABN (US$32.91mn), KfW (US$98mn) and Garanti Bankasi (US$88mn).

BNP Paribas, Citi, Denizbank, Fortis, Yapi Ve Kredi, Natixis, Rabobank International, Société Générale and WestLB all provided US$32mn each.

ABN Amro and IFC acted as global co-ordinators.

The ECAs involved have primarily supported financing of the deliveries from their respective suppliers. The DFIs supported the total financing package largely on an untied basis given the nature of the investment.

“Being the first major financing for its GSM network investments, this is a landmark financing for Avea that attracted excellent interest from the commercial bank market as well as various official agencies including ECAs as well as DFIs,” states Steve Ray, director, export and agency finance group, fixed income currencies and commodities, at Citi.

“It sets a new precedent for large agency-supported syndicated facilities for Turkish corporate borrowers, also demonstrating commercial banks’, ECAs’s and DFIs’s joint support for large and highly structured infrastructure financings in Turkey for private sponsors.

“There have previously been similar major financings in the Turkish market for financing of infrastructure investments, however, primarily with government support. Hence, the US$1.6bn multi-ECA, multi-DFI financing for Avea would be a good benchmark for future financings of Turkish corporates’s projects and especially for the large energy and power investments expected to be undertaken in 2008 and 2009 by private Turkish sponsors.”

The privatisation process of 55% of Turk Telecom shares was completed in November 2005 with Oger Telecom buying this amount. In September 2006, Turk Telecom increased its stake in Avea to a controlling 81% through buying Telecom Italia’s 40.6% stake in the company with the remaining 19% held by AY Bank. Accordingly, Oger Telecom maintains control over Avea through its 55% stake in Turk Telecom.

Deal Information:


Avea Iletisim Hizmetleri
Amount: US$1.6bn
Split into:

  • US$173mn EKN facility
  • US$300mn Sace facility
  • US$420mn IFC A/B loan
  • US$100mn DFI facility
  • US$100mn EDC facility
  • US$507mn syndicate of commercial lenders
    Lenders: ABN Amro; BNP Paribas; Citi; Dexia Credit Local; Fortis Bank; Bayerische Hypo-und Vereinsbank; IFC; DEG; Denizbank; EDC; Black Sea Trade and Development Bank; Garanti Bankasi; FMO; Natixis; Proparco; Rabobank; Société Générale; WestLB; KfW; Yapi Ve Kredi Bankasi
    ECAs and agencies: EDC; EKN; IFC; Sace
    Tenor: 8-9 years
    Date signed: April 2007