Turkey dollar bonds at multi-year lows

Turkey’s dollar-bonds fell across the curve on Friday with some longer-dated issues tumbling more than two cents to multiyear lows after the lira plumbed new record lows.

The sovereign 2036 bond lost 2.141 cents to 99.234 cents while the 2038 issue dropped 2.056 cents to 99.319 cents, according to Tradeweb data. Both bonds traded at their lowest since early 2014.

Turkey dollar bond yield spreads on the JPMorgan EMBI Global Diversified — the premium demanded by investors to the debt over safe-haven US Treasuries — widened by 10 basis points to 388 bps, the highest since 2012.

The lira moves came after President Tayyip Erdogan urged Turks to swap foreign exchange for gold or the lira. He also said there was “no option” other than cutting interest rates to spur growth.

“The meltdown in the currency accelerated today as the president has called for the central bank to lower interest rates even further and for the Turkish population to sell their foreign currency holdings,” said Phoenix Kalen, director of emerging markets strategy at Societe Generale. (RTRS)