Reuters | Jul 18, 2017, 09:35 PM IST
LONDON, July 18 (IFR) – The Republic of Iraq is expected to issue an international bond over the coming weeks, sources familiar with the matter said on Tuesday.
The new bond, expected to go up to US$1bn, will not be guaranteed by the United States Agency for International Development (USAID), which provided full faith and credit guarantee to Iraq‘s latest bond issuance last January.
Government representatives are expected to meet fixed income investors in London and the US ahead of the potential debt sale, said one of the sources.
The three banks declined to comment.
Iraq’s prime minister said last November that the finance ministry planned to sell two bonds of US$1bn each, one of which would have been guaranteed by the US government.
Earlier this month, the prime minister’s website said the council of ministers decided to permit the issuance of foreign bonds and loans specific to the general Federal budget law for financial year 2017.
The fundraising is needed to plug the country’s budget deficit, caused by lower international oil prices.
Iraq’s latest bond issuance, which was unrated, had a five-year maturity.
Iraq also has US$2.7bn in outstanding bonds issued in 2006 and maturing in 2028. Those notes, with a 5.8% coupon, were yielding about 8% on Tuesday. (Reporting by Sudip Roy; Editing by Philip Wright)