Azernews.Az

By Bloomberg

A group of mostly Turkish builders constructing a toll road from Istanbul to Izmir expects to sign a $5 billion package to refinance existing loans and gain fresh funding for the $7.5 billion project.

The consortium, which includes Astaldi SpA and Turkish builders Nurol Insaat and Ozaltin Insaat, will refinance $2 billion of loans secured for the first phase of the project and use the remainder for the second phase, Gokhan Akmut, chief financial officer of Ozaltin Insaat, said Monday in Istanbul.

The loan, the largest for such a project in Turkey, will be equally financed by lenders including Deutsche Bank AG and Turkey’s Halkbank, Akbank and Yapi Kredi, Akmut said. The cost of borrowing fell to 475 basis points over the London Interbank Offered Rate, compared with 580 basis on the previous loans. It will have a maturity of 15 years with a grace period of four years, he said, compared to 7 years in the previous deals.

The government included the project in the so-called debt assumption plan last year that offers guarantees from the Treasury. It has also offered minimum traffic guarantees for the four section of the road network.

The project was awarded to the consortium in 2009 and comprises 421 kilometers (263 miles) of roads, including a 3 kilometer suspension bridge across the sea of Marmara intended to cut travel time between the cities by more than half to three hours.

“Many international banks showed interest in the refinancing package and the government guarantees helped with the increased interest,” Akmut said in the interview.