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Turkey Blowout Auction Shows Some See Silver Lining in Junk

  • Bids at 10-year bond auction exceed supply by most since 2014
  • Aberdeen, Union Investment see value in 10 percent bond yields
Updated on

For at least one group of bond investors in Turkey, the country’s downgrade to junk at Moody’s Investors Service was a signal to jump in after yields became too attractive to ignore.

As the country’s debt and equity markets suffered the biggest losses in emerging markets on the first trading day since Friday’s cut, an auction of new government 10-year notes on Monday received the most bids in almost two years. Yields at the sale rose 22 basis points from an offer last month, to 9.94 percent, more than double the average yield on emerging-market sovereign debt in a Bloomberg index.