Witch Hunt Burning Turkish Bonds as Erdogan Lashes at Koc
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Investors are driving up bond yields of Turkish companies as concern mounts that Prime Minister Recep Tayyip Erdogan will take action against some for their alleged complicity in the unrest that spread this month in the nation.
The yield on dollar debt due April 2020 by Koc Holding AS, a group of companies with annual sales equivalent to about 6 percent of Turkey’s economic output, rose 210 basis points since protests ignited on May 31 to 6.27 percent today. That compares with a 100 basis-point increase to 5.04 percent for similar-maturity debt by higher-rated Vale SA of Brazil, a country that has also been roiled by anti-government protests. Koc traded at a premium of six basis points at the end of May.