Jan. 7 (Bloomberg) -- Venezuela will sell 30-year bonds for the first time since 1997, joining Turkey, Mexico and other emerging-market countries in borrowing on overseas markets since the start of the year to take advantage of tumbling yields.

Venezuela's dollar-denominated bonds will yield between 10.125 percent and 10.25 percent, the Finance Ministry said in a statement. The government hired J.P. Morgan Chase & Co. to manage a $1 billion bond sale today, said investors such as Jean- Dominique Butikofer at Julius Baer Asset Management in Zurich. Turkey sold $1.5 billion of 30-year bonds today.

The countries are raising funds on international markets as quickening global economic growth and improved credit ratings drive down yields for emerging-market borrowers. The premium emerging-market bonds pay above U.S. Treasuries narrowed to 3.8 percentage points from 7.65 percentage points at the end of 2002.

``I wouldn't be surprised to see other issuers tap the long end in the coming days if appetite remains in place,'' said Jeremy Brewin, who helps manage about $420 million of emerging- market assets at Morley Fund Managers Ltd. in London.

Six-Year High

Venezuela is borrowing after its most-traded bond due 2027 climbed to a six-year high of 94.55 cents on the dollar yesterday, cutting the yield to about 9.8 percent, according to J.P. Morgan. The yield has fallen from 16.2 percent in January 2002 as oil prices have gained. Venezuela is the world's fifth- largest oil supplier.

The 9.25 percent bond due 2027 fell 0.7 cent on the dollar to 93.85 at 12:21 p.m. in New York, according to Bloomberg generic prices. At that price, the bond yields 9.85 percent.

``Given the recent inflows and the strength of oil prices there is likely to be solid demand,'' said Mohamed El-Erian, who manages $12 billion of emerging market debt at Pacific Investment Management Co. in Newport Beach, California.

J.P. Morgan spokeswoman Brooke Harlow didn't return a phone call seeking comment.

Turkey's bonds will be priced to yield 8.23 percent, according to a statement sent to investors from UBS AG, which is managing the sale with Citigroup Inc. Turkey in September sold 10- year bonds at a yield of 9.65 percent.

Turkey's ability to meet its debt payments has increased after the International Monetary Fund last year agreed to release part of an $18 billion loan package and the U.S. offered $8.5 billion for the country's cooperation over neighboring Iraq. The European Union has said it will decide at the end of this year whether Turkey is ready to open talks on membership.

`Optimistic'

``Everybody's optimistic at the moment about Turkey because we know they want to join the EU,'' said Christian Schiweck, who placed an order for the securities out of the $4 billion of emerging-market assets he manages at Deka Investment GmbH in Frankfurt. The government received at least $3.5 billion of orders from investors to buy, Schiweck said.

The yield on the new bonds is lower than the 8.34 percent yield on Turkey's existing dollar bonds due 2030, before the Treasury announced the sale yesterday.

Turkey has a foreign-debt rating of B1 at Moody's Investors Service and B+ at Standard & Poor's. Both ratings are four levels below investment grade. Venezuela's foreign debt is rated Caa1 at Moody's, seven levels short of investment grade, and B-, six levels less than investment grade.

Developing nations' borrowers are benefiting from a surge in investment after pension funds and other investors demanded higher-yielding assets as U.S. interest rates fell to four-decade lows last year. Funds that had $13.6 billion at the start of last year showed $3 billion was added during 2003, the most since EmergingPortfolio.com Fund Research in Cambridge, Massachusetts began collecting the data in 1995.

Mexico sold $1 billion of five-year floating-rate notes yesterday. Poland also is preparing a five-year bond sale for this week, according to investors who were approached by bankers managing the sale.

Chile, Hungary, Lithuania, Indonesia and Pakistan all have said they are also lining up sales.

Last Updated: January 7, 2004 12:23 EST