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Turkey's Isbank says external borrowing costs still 'tolerable' after sovereign rating cut
March 28, 2017 / 8:46 AM / 8 months ago

Turkey's Isbank says external borrowing costs still 'tolerable' after sovereign rating cut

BURSA, Turkey, March 28 (Reuters) - Isbank has seen its short-term external borrowing costs increase by 30-40 basis points since Turkey’s sovereign debt was cut to junk status, a level that remains “tolerable”, the head of Turkey’s largest listed lender said.

Credit ratings agency Moody’s in September cut Turkey’s sovereign debt rating to “junk”, or non-investment grade, citing worries about the rule of law after an attempted coup, and risks from a slowing economy.

Rival agency Fitch Ratings in January followed suit, depriving Turkey of its sole remaining investment-grade rating on concerns about politics and monetary policy.

“Since losing the (sovereign) investment grade by both credit ratings agencies we have seen the impact in our borrowings,” Isbank General Manager Adnan Bali told reporters at a roundtable interview on the sidelines of an economic summit in Turkey’s northwestern province of Bursa on Saturday.

His comments were embargoed for release on Tuesday.

“We haven’t seen too much of a change in long-term (borrowing). There has been a 30-40 basis points effect in our short term external borrowings, which at the moment is tolerable. What’s important is the trend from now on.”

Isbank is Turkey’s largest listed bank by assets. (Reporting by Nevzat Devranoglu; Writing by David Dolan; Editing by Humeyra Pamuk)

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