July 10, 2018 / 9:52 AM / 5 months ago

Turkey dollar bonds extend falls, yield spread jumps

LONDON, July 10 (Reuters) - Turkish sovereign dollar bonds extended their falls on Tuesday as President Tayyip Erdogan’s move to cement his power by installing his son-in-law as finance minister rattled investors.

The 2045 issue dropped 4.3 cents to 87.2 cents, according to Tradeweb data, while the 2038 eurobond fell 3.9 cents to 95.87 cents.

The average yield spread paid by Turkish dollar bonds over U.S. Treasuries on the JPMorgan EMBI Global Diversified index surged by 26 basis points (bps) to 419 bps.

Investors are concerned by the lack of a cabinet role for former deputy Prime Minister Mehmet Simsek, seen as more market-friendly, and the fact that President Erdogan will now appoint the central bank governor and monetary policy committee members. (Reporting by Claire Milhench; editing by Karin Strohecker)

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