Turkey's Garanti BBVA secures 400 million euros in international financing
Key Facts
Turkey's Garanti BBVA secured a total of 400 million euros in financing from international markets, according to a disclosure dated 20 October 2026, under its international borrowing programme. The financing has maturities of 1,907 and 2,547 days, according to the bank's statement, which specified the transaction's value in euros and its maturities in days. The deal was executed through a future cash flow transaction under the Diversified Payment Rights programme, which links financing to rights to collect hard-currency payments. The bank defines these rights as "current and future collection rights on electronic payment orders in hard currencies", covering existing collections and those arising in the future. Sources of payment flows included in the programme encompass trade and workers' remittances, according to the definition published on the bank's investor relations website. They also include transport, shipping, tourism and construction, bringing payments linked to a range of economic activities into the programme's flows. This mechanism places the latest transaction within payment flow-backed borrowing, alongside the syndicated loans and subordinated bonds the bank announced during the year.
The bank previously completed a syndicated loan on 10 June 2026, with participation from 32 banks across 15 countries, according to its announcement of that transaction. The dollar and euro tranches of the June loan had a tenor of 367 days, compared with maturities of 1,907 and 2,547 days for the latest future cash flow transaction. The bank set the annual all-in cost of the June loan's dollar tranche at the Secured Overnight Financing Rate, or SOFR, plus a margin of 1.25 percentage points. The euro tranche with the same tenor carried an annual cost of the Euro Interbank Offered Rate, or Euribor, plus a margin of 1.10 percentage points, according to the bank's syndicated loans page. For the previous syndicated loan announced in December 2025, the cost of the dollar tranche with a tenor of 367 days was SOFR plus 1.50 percentage points, according to a BBVA Group statement. The euro tranche of that loan cost Euribor plus 1.25 percentage points for the same tenor of 367 days. The June loan's margins over both benchmark rates were therefore lower than those on the December loan, for both dollar and euro financing.
The financing disclosure on 20 October preceded the Turkish central bank's decision on 22 October 2026 to cut its key interest rate from 37% to 36%. The cut applied to the one-week repo rate, according to the central bank's statement, addressing domestic interest rates while Garanti's euro-denominated transaction was announced under its international borrowing programme. Explaining the economic backdrop to its decision, the central bank said domestic demand remained weak. Meanwhile, it pointed to persistently high energy prices due to geopolitical tensions, linking them to risks surrounding the inflation path. It added in its statement that "rising energy prices due to ongoing geopolitical tensions continue to pose an upside risk to the inflation outlook".
In another financing transaction preceding the latest deal, Garanti BBVA announced the completion of a 125 million dollar sustainable subordinated bond issue with a consortium including the International Finance Corporation and Germany's development finance institution DEG. The bank posted the announcement of that issue on 16 September 2026, ahead of the October disclosure of the 400 million euros in financing. The subordinated bond issue adds another instrument to the financing transactions announced by the bank, alongside the June syndicated loan and the October future cash flow transaction. BBVA Group holds about 85.97% of the Turkish bank, according to the ownership structure published on its investor relations website. When announcing the subordinated bond issue, the bank said it would continue to seek "new financing opportunities" through partnerships with various investors and financial institutions. Regarding upcoming disclosures, the bank plans to publish its financial statements for the period from 1 January to 30 September 2026, according to its published financial calendar. It set 28 October 2026 as the planned date for making those financial statements publicly available.