Written by: Basant El-Farmawy
The international bond market (Eurobond) linked to Turkish energy companies is witnessing a state of notable turmoil, as bonds for "Aydem Energy" and "Gediz Elektrik" have been subjected to a widespread sell-off over the past ten days, leading to a sharp decline in their prices and a rise in their yields in global markets.
Decline in Bond Prices and Rise in Yields
"Gediz Elektrik" bonds recorded a decline of about $15 in their market value over the last ten days, reaching $77.58 per bond, which pushed the interest rate on these bonds up to 19.47%. In the same context, "Aydem Energy" bonds saw a similar decline, with the bond price falling by about $1.77 to reach $90.61, with interest rising to 13.46%.
Bonds of "Aydem Electricity Distribution," a subsidiary of the "Aydem" group which had issued bonds worth $500 million earlier this year, were also affected by this sell-off, with the interest rate on them rising to 14.49%.
Ambiguity Regarding Sell-off Motives
This selling trend has puzzled financial analysts, especially since the companies in question are not suffering from solvency issues, as data issued by public disclosure platforms indicate that bond interest payments are being made regularly and without delay. These developments also come in light of the relative stability of the legislative and legal systems regulating the electricity sector in Turkey.
Observers link this situation to liquidity pressures facing the Turkish bond market in general, the effects of the investment fund crisis that has impacted investor confidence, and general anticipation of upcoming updates to electricity sales prices. The bonds of these companies are traded on the "Euronext Dublin" exchange in Ireland, amid close monitoring by investors regarding the stability of these assets during the coming period.
