Turkey's export-import bank, Teximbank, is likely to turn to export securitization in an effort to secure cheaper funding than that available in the syndicated loan market, according to sources in Istanbul and London.

The bank is examining a three-year deal worth around $50 million backed by receivables transferred from individual exporters to the bank. The timing of the deal will depend on investor appetite, but if it is successful the bank is hoping to launch a series of similar transactions in 2000 and beyond.

According to bank officials, Teximbank has turned to securitization because of a spike in the cost of syndicated loans as lenders worry about the state of the Turkish economy, which contracted 3.4% in the second quarter of 1999, and the impact of the earthquake which hit the country's industrial heartland in August.

Experts in London, however, wondered about the strength of investor appetite for structured paper from Turkey, even if Turkish risk is minimized by the nature of export receivables transactions, as there has been a steady flow of export-backed deals over the last two years and the investor base for Turkish ABS is relatively limited.

"There are several banks hoping to tap the market with export securitizations in the near future and there are only a limited amount of people who will buy them, mainly U.S. investors, and they have already bought similar deals in the past. The investors will certainly have the whiphand," said a rating agency expert.

If the deal goes ahead, Teximbank will not be the first emerging market export-import bank to launch a securitization: at the end of 1998, the Export Import Bank of Korea launched a triple-A rated $697 million CLO deal.

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