Investors Looking For High-Risk Income May Be Attracted To Turkish Bonds; The Country's Debt Was Recently Lifted To Investment Grade And Record Issuance Is Expected For 2013

Monday, December 31, 2012 08:22
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Investors Looking For High-Risk Income May Be Attracted To Turkish Bonds; The Country's Debt Was Recently Lifted To Investment Grade And Record Issuance Is Expected For 2013

Tags: asset allocation | bonds | global investing

Turkey is set to issue a record amount of international bonds in 2013 as the result of lower costs and the recent investment-grade credit rating for the country’s debt.
 
Over $3.1 billion in international debt was issued in 2012 by non-financial companies. That’s over ten times the amount issued in 2011.

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Of that amount, $1.2 billion was from Turkey. Momentum for Turkish bonds is expected to build out of anticipation of a second credit upgrade for the country’s debt to investment grade status during the first half of the year.
 
But the country is also subject to geo-political tensions and external imbalances. This could dampen investor appetite and make it difficult to finance the current-account deficit.
 
Turkey also has improving internal economics, having sold two power grids in Istanbul and Ismir for $3.2 billion. The sales may allow the country to meet goals for asset sales for the first time in four years and could go a long way toward closing the budget deficit.
 
Overall in 2012, Turkey has sold $11.2 of state assets but will also need funding from bond sales.
 
For investors looking for higher income and who can withstand the risk, Turkish bonds may be worth investigating for their more aggressive asset allocations.

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