Turkey turmoil, crude oil take EM lower; Ronshine prices $225 million tap of 8¼% notes

By Paul A. Harris

Portland, Ore., July 11 – Political turmoil in Turkey and crude oil prices that tumbled more than 4¾% roiled emerging markets debt on Wednesday, a market source said.

Turkey credit spreads went out on the wides of the day, according to an investor who specified that Turkey was 45 basis points wider on the near end of the maturity curve, 22 bps wider on the far end.

Those spread have widened 55 bps and 90 bps, respectively, since Monday.

Turkish debt came under pressure on news that re-elected Turkish president Recep Erdogan adopted new executive powers and named his son-in-law as Turkey’s finance minister, replacing incumbents with whom the markets had been more comfortable.

In addition to that, news surfaced on Wednesday that Turkey’s current account gap widened in May, year-over-year, further than analysts expected, a source said, referring to data from Turkey’s central bank.

Emerging markets debt was further pressured by a steep fall in crude oil prices, sources said.

In the primary market Brazil’s Cemig Geracao e Transmissao SA is attempting to place an add-on to its 9¼% notes due December 2024.

Ronshine China Holdings announced that it priced a $225 million add-on to its 8¼% senior notes due Feb. 1, 2021 at 92.971.

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