LONDON, Feb 15 (Reuters) - Turkish sovereign dollar bonds sold off heavily on Monday and default insurance costs rose amid escalating military tensions around its border with Syria.
Turkey vowed the “harshest reaction” against Kurdish militia if they approach the northern Syrian town of Azaz. The Syrian army is within 25 km (15 miles) of the Turkish border and the Kurdish YPG militia has used the situation to extend its presence along the Turkish border
Ankara has denied its security forces have entered Syrian territory.
Turksih yield spreads over U.S. Treasuries rose 16 basis points on the EMBI Global emerging debt index to 350 bps, their widest since September, while the underlying index was unchanged . Data from Tradeweb showed the 2034 issue down more than one cent.
Turkish five-year credit default swaps rose 10 basis points from Friday’s close to 310 bps, according to Markit.
Reporting by Sujata Rao, editing by Nigel Stephenson