Trade Bank of Iraq plans second $1B bond issue

Published February 14th, 2017 - 08:00 GMT
The Iraqi government is seeking to lower its international borrowing costs after the country was badly hit by the slump in oil prices. (Shutterstock)
The Iraqi government is seeking to lower its international borrowing costs after the country was badly hit by the slump in oil prices. (Shutterstock)

Trade Bank of Iraq (TBI) is working with Citi, Deutsche Bank and JP Morgan on a second $1 billion bond issue for Iraq.

In January, Iraq successfully closed a $1 billion issuance guaranteed by the USA.  According to a statement on usaid.gov, the loan guarantee underscores the strong and enduring commitment of the United States to support the government of Iraq in this critical moment in the fight against Islamic State. As part of a comprehensive international assistance package - anchored by an International Monetary Fund-supported reform programme - the guarantee provides Iraq access to low-cost financing essential to delivering critical services to all the people of Iraq, while laying the foundation for long-term stability and growth through economic and institutional reforms. The issuance of a $1 billion, five-year Iraqi sovereign bond on international markets is backed by a 100 per cent guarantee by the US government of the repayment of principal and interest, and was priced at a coupon rate of 2.149 per cent.

Sources told Banker Middle East that a second tranche of a further $1 billion sovereign issuance by Iraq is likely to come to market before the end of the first quarter of 2017. The five-year bond issued in January had a coupon of 2.149 per cent.

The Iraqi government is seeking to lower its international borrowing costs after the country was badly hit by the slump in oil prices. Iraq relies on oil exports for around 95 per cent of government revenues.

By Georgina Enzer

Editor’s note: This article has been edited from the source material to include details of the January $1B sovereign bond issue.

 


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