Turkish bank Akbanks $1 billion bond has avoided the
usual loan participation structure and planned ahead for an
expected change to tax laws.
Akbank decided to bite the bullet and try a direct
issuance, notwithstanding the witholding tax costs, said
Simon Porter, who led the deal for Akbanks UK advisers
Baker & McKenzie. The loan participation has become
increasingly difficult and expensive since tax regulations
changed in Turkey.
To avoid the withholding tax that Turkish law applies to
bonds, transactions in the country have traditionally been
structured as loan participations.
But since 2007 when tax rules were...