Türk Telekom signs a $1bn club loan with 14 banks for 5G and fibre

Türk Telekom signed a USD 1 billion long-term club loan facility agreement with 14 international banks on 26 October, to finance mainly its 5G and fibre investments as well as general corporate needs, the company said in a regulatory disclosure.

The facility has a final maturity of October 2031 and an average maturity of 4.55 years. It pays interest at six-month SOFR plus 2.00 per cent a year, and its all-in cost, including the upfront fees paid to the banks, is six-month SOFR plus 2.15 per cent, according to the notice filed on Türkiye's Public Disclosure Platform.

Bank of America acted as coordinator and mandated lead arranger, and ING Bank as facility agent and mandated lead arranger. BNP Paribas Fortis, Citibank, Emirates NBD, First Abu Dhabi Bank, HSBC Bank, Intesa Sanpaolo, MUFG Bank, Société Générale, Standard Chartered Bank and SMBC Bank were the other mandated lead arrangers, with Mashreqbank as lead arranger and J.P. Morgan as arranger. The notice does not say whether the loan has been drawn, how it splits between 5G, fibre and other uses, whether any of it refinances existing debt, or whether it will be hedged into lira.

Against Turkcell's March facility

The loan matches in size the facility its main rival took earlier in the year. Turkcell drew a USD 1 billion Murabaha syndicated facility on 30 March, with a profit rate of three-month SOFR plus 1.95 per cent a year and an all-in cost of three-month SOFR plus 2.14 per cent including fees, its half-year Form 6-K shows. The two all-in margins differ by one hundredth of a percentage point, but they sit on different reference rates, three-month for Turkcell and six-month for Türk Telekom, so the two costs are not directly comparable.

Turkcell's consolidated debt rose to TL 212.1 billion at 30 June from TL 186.8 billion at the end of 2025, driven primarily by that facility, the filing says. After hedging, 68 per cent of its consolidated debt was in US dollars.

At home, Türk Telekom's subsidiary TTNET approved up to TL 7.5 billion of lease certificates with maturities of up to five years in September, alongside a share buyback of up to TL 2.5 billion at the parent, as Corridor Signal reported.

The balance sheet before the facility

Türk Telekom's net debt stood at 1.00 times EBITDA at the end of June, up from 0.60 times at the end of 2025; it was 0.99 times at the end of March, after payments related to the concession and the 5G licence, its second-quarter results release said. Net debt was TL 122.4 billion, against TL 74.2 billion a year earlier.

The company was short USD 2.4 billion in foreign currency at the end of June, a position that includes USD 2.8 billion of concession and mobile licence obligations; without them it would have been long USD 331 million, the release said. Net financial expense rose 91.6 per cent year on year to TL 19.3 billion in the second quarter, mainly on foreign-exchange losses on those obligations and on higher hedging costs. Corridor Signal set out how the two operators carry their 5G bills in an analysis of their half-year filings.

Spending on the networks the loan is meant to fund was already rising. Capital expenditure excluding solar investments was TL 23.1 billion in the second quarter, up 39.8 per cent from TL 16.5 billion a year earlier, an increase the release attributes largely to 5G and fibre.

Unlevered free cash flow was TL 3.9 billion in the second quarter, against TL 9.4 billion a year earlier, affected by higher capital spending, the release said. For the full year, the company set its capital expenditure intensity at 34 per cent of revenue in August, from a range of 33 to 34 per cent, in a guidance revision that excludes spending on solar investments, the concession extension and licence fees. The same revision narrowed consolidated revenue growth guidance, excluding IFRIC 12, to 8 per cent and raised the company's assumption for year-end inflation to 27 per cent from 22 per cent.

Next document: the third-quarter accounts

Türk Telekom publishes its results for July to September on 4 November, as Corridor Signal reported from its calendar notice. The loan was signed after that quarter closed on 30 September, so those accounts will not include it on the 30 September balance sheet.