Even prior to the lira’s dramatic decline in recent weeks – the currency is down more than 15% so far this year – the Republic of Turkey was being eyed up by restructuring advisors and lawyers on the lookout for the next big emerging market distressed destination.
On a recent trip to Turkey, Debtwire observed Big Four consultancies building up their restructuring capacity in the country, while law firms are flying out international partners with restructuring expertise to bolster their on-the-ground capabilities. London-, New York- and Dubai-based bankers increasingly talk of the swelling pipeline of jumbo-sized deals in Turkey.
As of March 2018, some 33% of the TRY 2.2trn of loans on Turkish banks’ books was denominated in foreign currencies. It is little surprise that, given the long slide in the lira, corporates are beginning to struggle to service their hard currency debts.
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