EM back in vogue - for now

viernes 14 de febrero de 2014 08:16 GYT

* Turkey leads bond issuance charge

* Cash-rich investors scrabble for new deals

* Bankers warn of further wobbles

By Sudip Roy

LONDON, Feb 14 (IFR) - Risk appetite is in full flow, led by Turkey's remarkable return to the international bond markets on Wednesday, just weeks after a currency crisis had thrown the country, and through it the emerging markets asset class, into a tailspin.

Not only did the sovereign raise US$1.5bn, it did so through a 31-year bond as investors cast aside doubts about Turkey's vulnerable political and financial situation - on Thursday the country posted a 33.7% increase in its current account deficit for 2013 to US$65.4bn, its second worst in history.

Instead, they took the opportunity to gain exposure to a high-yielding security in what is still a low interest-rate environment. The new notes priced to yield 6.70%, a small premium over Turkey's secondary curve.

The deal illustrates how even despite last month's turmoil, which was largely in the currency and local rates markets, fixed-income fund managers have remained committed to emerging market credits, waiting for the right opportunity to re-invest.

"The market is just awash with cash looking for high-quality credit," said Nick Darrant, head of CEEMEA syndicate at BNP Paribas, which co-led the Turkey deal with Bank of America Merrill Lynch and Goldman Sachs.   Continuación...