Erdoganomics Pushes Turkey Credit Risk Above Junk-Rated Russia
- Turkey CDS widen most since Sept. on political turmoil in May
- Nation’s debt riskier than Russia for first time in two years
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Unpredictable politics and a clouding economic outlook have persuaded investors that Turkey’s debt is now a riskier bet than junk-rated Russia.
The cost of insuring Turkish bonds against non payment jumped in May by the most in eight months, with five-year credit default swaps widening 33 basis points to 273, surpassing Russia for the first time since mid 2014. The two first crossed on May 4 as Turkish bonds retreated in the midst of a political row between President Recep Tayyip Erdogan and former Prime Minister Ahmet Davutoglu, culminating in the premier stepping down.