Turkey Wealth Fund Seeks to Refinance Loan in Test After Shakeup

Turkey’s sovereign wealth fund is sounding out global banks on refinancing its only syndicated loan as the institution emerges from a shakeup this week.

The fund, known as TWF, is in talks to refinance a 1 billion-euro ($1.2 billion) loan it drew in March 2019 and which matures in five days, according to people familiar with the matter.

Abundant global liquidity and the government’s guarantee on 95% of the facility will likely help the sovereign investor close the deal, the people said, asking not to be identified because the information isn’t public.

TWF declined to comment.

Investor response to the deal could test sentiment after President Recep Tayyip Erdogan removed Zafer Sonmez as chief executive officer of the fund on Tuesday and named Arda Ermut in his place.

The decision deepened a shakeup at top economic institutions that began with the departure on Monday of the head of Borsa Istanbul, which is owned by the Turkish wealth fund. Both executives were appointed under Berat Albayrak, Erdogan’s son-in-law who was treasury and finance minister for two years until his abrupt resignation in November.

Turkey established its sovereign fund in 2016 and mandated it to play a leading role in making investments that are too big for the private sector. It’s previously come under attack from the political opposition for acting as a parallel Treasury that can borrow huge amounts against the public assets it took over.

In an interview last month, Sonmez said the fund planned to tap international debt markets in the second half of the year after postponing its first Eurobond sale plan in October due to adverse market conditions.

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