High yields tempt wary investors back into Turkish debt

Source:Financial Times Date:17Sep2021

The Editor says:  It is no magic to sell Eurobonds amidst hunt for yield, the trick is to sell them at low spreads.  Turkey fails the test. FT writes:

The allure of high yields has also been too strong for some investors to ignore. A 12-year bond, denominated in US dollars, that sold as part of this week’s debt deal will be issued at a yield of 6.5 per cent, above the roughly 5 per cent yield on offer across the EM government bond market, according to a JPMorgan debt index. Turkish debt denominated in lira provides even juicier yields, with the benchmark 10-year government bond paying 16 per cent. Some traders participating in the “carry trade”, in which they borrow in the currencies of countries with relatively low yields like dollars or euros and then lend in areas with higher interest rates, have also been drawn in.