INTERVIEW-Iraq may sell $2 billion in bonds, betting on aid to lower costs
Iraq may go ahead with plans to sell $2 billion in bonds in the next three months, hoping that international aid will lower the cost of borrowing that derailed earlier plans to issue the debt, the governor of the Iraqi central bank said in a interview Tuesday in Baghdad. Iraq would like to see the […]Maher Chmaytelli writes for Reuters:
Iraq may go ahead with plans to sell $2 billion in bonds in the next three months, hoping that international aid will lower the cost of borrowing that derailed earlier plans to issue the debt, the governor of the Iraqi central bank said in a interview Tuesday in Baghdad.
Iraq would like to see the yield drop to 5 percent from the 11 percent investors originally demanded, Governor Ali al-Alak said. The sale could be managed by banks including Standard Chartered, Deutsche Bank and Citi, he said.
Iraq had called off a sale of U.S. dollar-denominated bonds in October 2015 rather than pay the 11 percent yield. It revived those plans in December 2015, saying gains against Islamic State and the support of the World Bank and the International Monetary Fund should cut its costs.
Iraq last sold debt internationally in 2006, when it issued about $2.7 billion of bonds due in 2028 with a coupon of 5.8 percent. Those bonds now trade around 70 cents on the dollar, for a yield of 11.66 percent. Standard & Poor's rates Iraq's long-term credit at B-, six notches below investment-grade.
