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Turkey Issues $1.5 Billion in Bonds

Turkey sold a staggering  $1.5 billion in U.S. dollar bonds on Tuesday!

As investors dip back into emerging-market assets, the bonds have a yield of 10% and mature in 2028.

Tweet on Turkey’s record selling bonds

chart on lira’s slump

The country’s finance ministry said it received orders for three times the amount issued, and U.S. investors were the biggest buyers.

Investors have fled Turkish assets in recent years as President Recep Tayyip Erdogan pressured the central bank into cutting interest rates even though Turkey is suffering from one of the world’s highest rates of inflation. Turkey’s market woes have been compounded by a broader rout this year in emerging markets amid rising global interest rates and inflation.

  • The lira has fallen 29% against the U.S. dollar this year.

Turkey’s bond sale is the latest sign that the market deep-freeze that left many emerging markets unable to raise new debt is thawing. Poland said Monday it hired bankers to sell five- and 10-year U.S. dollar bonds.

Foreign investors poured a net $8.7 billion into emerging market bonds and $9.3 billion into stocks last month, according to data from the Institute of International Finance that excludes China.

Samy Muaddi, a portfolio manager at T. Rowe Price, said the outlook for higher-rated emerging markets has improved, helping to drive down their borrowing costs. But smaller developing economies, sometimes referred to as frontier markets, remain effectively shut out of global markets


Image;Turkish Central Bank