Re­struc­tured for­eign cur­rency debts to be con­verted to Turk­ish lira

Daily Sabah (Turkey) - - Business -

RE­STRUC­TURED for­eign cur­rency loans in Turkey will be con­verted to Turk­ish lira at the cen­tral bank ex­change rate in force on the day of re­struc­tur­ing, a pres­i­den­tial de­cree said yes­ter­day.

The de­cree on the Amend­ment to the Res­o­lu­tion of Trea­sury Sup­port Pro­vided to Credit Guar­an­tee In­sti­tu­tions, pub­lished in the Of­fi­cial Gazette, al­lowed the day’s lira rate to be used in com­pa­nies’ re­struc­tur­ing of for­eign ex­change (forex) loans.

Ac­cord­ingly, the ma­tu­rity of en­ter­prise loans was set as a max­i­mum of five years, with a min­i­mum ma­tu­rity of six months and a prin­ci­pal grace pe­riod of not more than one year.

The ma­tu­rity of the in­vest­ment loans was de­ter­mined as max­i­mum 10 years, with a min­i­mum ma­tu­rity of six months and a prin­ci­pal grace pe­riod of max­i­mum three years.

If nec­es­sary, a pe­riod of one month can be added to the grace pe­riod, ac­cord­ing to the de­cree.

The lender will be able to change the ma­tu­rity of the loan and to re­struc­ture the loan more than once with a con­di­tion of not ex­ceed­ing 96 months for busi­ness loans and 156 months for in­vest­ment loans, start­ing from the open­ing date of the loan.

In the case of debt re­struc­tur­ing, the grace pe­riod will be set at a max­i­mum of 12 months. The re­struc­tur­ing or ma­tu­rity change will be ar­ranged in a way that will not add ad­di­tional fi­nan­cial bur­den to the Trea­sury and Fi­nance Min­istry.

The guar­an­tee limit for each ben­e­fi­ciary will be de­ter­mined by the Trea­sury and Fi­nance Min­is­ter, with a max­i­mum of TL 25 mil­lion ($4.17 mil­lion) for ben­e­fi­cia­ries de­fined as a small and medium-sized en­ter­prise (SME) , and a max­i­mum of TL 200 mil­lion for other ben­e­fi­cia­ries.

The Turk­ish lira has lost over 37 per­cent in value against the U.S. dol­lar since the be­gin­ning of the year. In an at­tempt to halt lira’s slide, the Turk­ish cen­tral bank an­nounced a 6.25 per­cent­age point rate hike last month.

The lira traded at 6.07 against the U.S. dol­lar Wed­nes­day, while the same fig­ure stood at 5.97 yes­ter­day.

Ear­lier this week, the Banks As­so­ci­a­tion of Turkey (TBB) is­sued a rec­om­men­da­tion for busi­nesses whose debt to banks and other fi­nan­cial cor­po­ra­tions are cal­cu­lated be­low TL 15 mil­lion, TL 25 mil­lion to­gether with non-cash risks, may re­struc­ture their debts up to 24 months with no cap­i­tal pay­ment dur­ing a six month pe­riod.

On Sept. 19, Turk­ish banks and fi­nan­cial in­sti­tu­tions signed a loan re­struc­tur­ing frame­work agree­ment in or­der to help busi­nesses hav­ing dif­fi­culty pay­ing off their debts, the TBB an­nounced.

The agree­ment was signed by the lenders and other fi­nan­cial in­sti­tu­tions, whose shares in to­tal loans are at around 90 per­cent, the as­so­ci­a­tion said adding that other fi­nan­cial in­sti­tu­tions were ex­pected to sign the agree­ment as soon as their in­ter­nal pro­ce­dures were com­pleted.

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