Turkey bonds fade after strong open; Mogo prices €50 million deal; selloff hits EM debt

By Rebecca Melvin

New York, June 25 – Turkey’s bonds faded back after a strong open on Monday in the wake of election results.

The Turkey 6 1/8% notes due 2028 were about 93.44, which was off 0.2% on the day but close to their high of 93.6 in recent sessions, after news that President Recep Tayyip Erdogan, a vocal opponent of raising the country’s interest rates, had won his second term and the AKP retained its parliamentary majority.

Turkey’s five-year sovereign credit default swaps tightened by 25 bps to 275 bps.

The drop back was “not a surprise given the amazing rip we saw to finish off last week,” a London-based trader said of the bonds.

Also on Monday, Mogo Finance SA and its group companies priced a small issue of €50 million of notes due 2022 at par to yield 9˝%. The subsidiary of AS Mogo, the Latvia-based used-car financing company, had announced at the beginning of May that it was planning to price up to €75 million of notes.

But overall Monday was dominated by fear bringing out mostly sellers in the secondary market and a quiet primary as global stocks sank while Treasury bonds gained in the broader markets.

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