Turkey bonds see small relief rally after failed coup; Sekerbank shelves deal; Lat-Am dips

By Christine Van Dusen

Atlanta, July 25 – Turkey remained in focus on Monday as bonds experienced a small relief rally after the recent failed coup attempt, which led to the arrests of journalists, judges, police and others in a wide-scale crackdown.

On Monday, the sovereign’s five-year credit default swaps spreads moved 2 basis points tighter, clocking in at 275 bps.

“We have some two way flow going though, with the usual favored bonds being chased,” a trader said. “Things are now starting to normalize.”

Turkey’s KOC Holding AS saw its bonds move tighter after trading 130 bps wide to the sovereign, he said.

In other news from Turkey, Istanbul-based lender Sekerbank TAS has canceled plans for a dollar-denominated issue of notes amid political turmoil in the country, a market source said.

Bonds from Latin America moved wider and lower on the day, with prices closing only slightly better than the lowest of the session, a New York-based trader said.

Five-year credit default swaps spreads for Brazil closed Monday at 294 bps from 286 bps, while Mexico’s moved to 144 bps from 139 bps.

“Cash prices felt weak all day long as spread-widening was not tempered with any sort of Treasury rally, which has the market adjusting levels lower,” he said. “Lat-Am high yield also finishes lower on the day with oil weakness hitting Venezuela and PDVSA.”

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