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Central Bank of the Republic of Türkiye (TCMB) has exempted Turkish lira loans used to repay corporate debt maturing by the end of 2026 from commercial credit growth limits, easing a constraint on companies facing upcoming debt payments.
The central bank informed banks of the change in a written notice, allowing them to extend the loans without counting them toward the existing limits on Turkish lira commercial credit growth.
The exemption covers debt instruments issued domestically in Turkish lira by private-sector companies other than banks. It applies to loans used to repay instruments falling due by the end of the year.
The decision comes as missed debt payments and restructuring proposals increase pressure on Türkiye's private-sector debt market, particularly following September's market turmoil.
After several investment funds failed to meet redemption requests in mid-September, the Capital Markets Board (SPK) began liquidating 131 investment funds, affecting more than 455,000 investors, with combined assets estimated at ₺936.3 billion ($19.1 billion) at the time.
According to notifications from the Central Securities Depository of Türkiye (MKK) last week, redemption and coupon payments due on four debt instruments on Oct. 23, 2026, could not be made.
The notices indicated that the payments could not be completed because the required funds had not been transferred, but did not establish a new repayment schedule for the four instruments.
Treasury and Finance Minister Mehmet Simsek put the private-sector bond market at around ₺1 trillion ($20 billion), with ₺26.5 billion in debt due to mature by year-end.
Spanish lender BBVA warned Friday that Turkish corporate bonds face heavy selling pressure, with a recovery hinging on greater clarity over Vestel's restructuring and the scope of the investment fund probe.
Vestel, Zorlu Holding's electronics arm, last week proposed restructuring its $500 million in overseas-issued Eurobonds, offering investors either a maturity extension at a lower interest rate or new bonds at a 45% reduction in principal.
Days later, Zorlu Enerji, the group's energy subsidiary, asked bondholders to approve a six-month delay in a $60.5 million coupon payment on its overseas-issued Eurobonds, originally due Oct. 23, 2026.
Vestel's proposal has heightened concerns over recoveries on distressed corporate bonds, prompting investors to reassess their exposure to other highly leveraged Turkish issuers, BBVA noted.
Spillover effects from domestic fund turmoil and weakness in aviation financing, amid high fuel costs and geopolitical disruptions, have added to the pressure.
BBVA sees limited risk of a broader sector-wide problem but warns that investors are reassessing corporate credit risks, including liquidity, refinancing and potential recoveries.
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