Bussiness and financial district of Levent, which comprises of leading Turkish companies' headquarters and popular shopping malls, is seen from the Sapphire Tower in Istanbul, Turkey May 3, 2016. REUTERS/Murad Sezer
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Turkish banks are agreeing to higher funding costs if the country's credit rating is cut to junk, with the premium paid by some lenders potentially set to rise more than 50 percent.Isbank this month signed a two-tranche 367-day loan of 661 million euros ($739 million) and $302 million, while TEB secured a 352 million euro and $205 million loan in August. If both do, the margin will climb to 75 basis points.The banks will pay 40 basis points for other fees regardless of the rating cuts, making the total cost of the loan 115 basis points should the firms cut Turkey to junk, compared with 75 basis points for no cut.
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