Iraq's Credit Rating



Iraq Seeks Credit Rating before Bond Issue

May 1, 2015 

By John Lee.

Reuters reports that Iraq is approaching credit rating agencies to obtain a sovereign credit rating as it prepares for its first international bond sale for nine years.

Finance Minister Hoshiyar Zebari (pictured) told the news agency:

“We started the process … The banks are also trying to help us in that direction.”

Iraq has said it will issue $5 billion (6 trillion Iraqi dinar) of debt to help cover a projected budget deficit of about $25 billion this year. A credit rating from a major agency could help persuade global fund managers to subscribe to the issue.

Iraq has been discussing its bond issue plans with Citibank and Deutsche Bank.

Reuters quotes fund managers as saying that Iraq would struggle to sell $5 billion in a short space of time, even with generous pricing.

(Source: Reuters)

http://www.iraq-businessnews.com/2015/05/01/iraq-seeks-credit-rating-before-bond-issue

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Business News
| Thu Apr 30, 2015 11:56am BST

Exclusive - Iraq seeks credit rating before jumbo bond issue

DUBAI | By Hadeel Al Sayegh
Iraq's Finance Minister Hoshiyar Zebari speaks during a news conference in Baghdad February 26, 2015.    REUTERS/Khalid al-Mousily
Iraq's Finance Minister Hoshiyar Zebari speaks during a news conference in Baghdad February 26, 2015.
Reuters/Khalid al-Mousily

Iraq plans to obtain a sovereign credit rating and is approaching rating agencies as it prepares for a jumbo $5 billion (£3.2 billion) bond issue needed to cover a budget deficit caused by low oil prices, its finance minister said on Thursday.

"We started the process," Hoshiyar Zebari told Reuters by telephone. "The banks are also trying to help us in that direction.”

Iraq has said it will issue $5 billion of debt in its first international bond sale for nine years. Its need for cash is acute; the government has projected a budget deficit of about $25 billion this year, in a budget of roughly $100 billion.

Obtaining a credit rating from a major agency, which Iraq currently lacks, could help to persuade global fund managers and banks to subscribe to the issue.

Zebari said Iraq was trying to approach two or three rating agencies, which he did not name. It has been discussing its bond issue plan with Citibank and Deutsche Bank.

The process of obtaining a credit rating could be a delicate one for Iraq, requiring it to open its books to the agencies and disclose new information on its finances. Zebari did not say when he expected the process to be completed.

Iraq's huge oil reserves in its southern fields, which have not been touched by the Islamic State insurgency, are expected to draw buyers to its bonds. But many fund managers think it would struggle to sell $5 billion in a short space of time, even with generous pricing.

Asked if $5 billion was too ambitious, Zebari said: "We have in the budget a commitment to issue $6 billion. So this is the low - this is how we plan to cover our deficit. But there’s no way we can do it in one tranche.”

Iraq has an outstanding U.S. dollar bond maturing in 2028 462652AA6=; panic selling late last year as oil prices plunged pushed its yield to a record high of 10.49 percent from around 7.2 percent in September, but it has since dropped back to 8.04 percent.

Iraqi five-year credit default swaps IQGV5YUSAC=MP, used to insure against any sovereign default, are at 539 basis points, near their highest levels since late 2009.

In addition to the international bond issue, Iraq has introduced or is planning other fiscal measures including a local currency bond issue to banks, taxes on some consumer goods and public wage cuts. It has also been considering whether to ask for aid from the International Monetary Fund.

http://uk.reuters.com/article/2015/04/30/uk-iraq-debt-ratings-idUKKBN0NL1A920150430

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Exclusive-Iraq Seeks Credit Rating Before Jumbo Bond Issue

By REUTERSAPRIL 30, 2015, 6:57 A.M. E.D.T.

DUBAI — Iraq plans to obtain a sovereign credit rating and is approaching rating agencies as it prepares for a jumbo $5 billion (£3.2 billion) bond issue needed to cover a budget deficit caused by low oil prices, its finance minister said on Thursday.

"We started the process," Hoshiyar Zebari told Reuters by telephone. "The banks are also trying to help us in that direction.”

Iraq has said it will issue $5 billion of debt in its first international bond sale for nine years. Its need for cash is acute; the government has projected a budget deficit of about $25 billion this year, in a budget of roughly $100 billion.

Obtaining a credit rating from a major agency, which Iraq currently lacks, could help to persuade global fund managers and banks to subscribe to the issue.

Zebari said Iraq was trying to approach two or three rating agencies, which he did not name. It has been discussing its bond issue plan with Citibank and Deutsche Bank.

The process of obtaining a credit rating could be a delicate one for Iraq, requiring it to open its books to the agencies and disclose new information on its finances. Zebari did not say when he expected the process to be completed.

Iraq's huge oil reserves in its southern fields, which have not been touched by the Islamic State insurgency, are expected to draw buyers to its bonds. But many fund managers think it would struggle to sell $5 billion in a short space of time, even with generous pricing.

Asked if $5 billion was too ambitious, Zebari said: "We have in the budget a commitment to issue $6 billion. So this is the low - this is how we plan to cover our deficit. But there’s no way we can do it in one tranche.”

Iraq has an outstanding U.S. dollar bond maturing in 2028 <462652AA6=>; panic selling late last year as oil prices plunged pushed its yield to a record high of 10.49 percent from around 7.2 percent in September, but it has since dropped back to 8.04 percent.

Iraqi five-year credit default swaps , used to insure against any sovereign default, are at 539 basis points, near their highest levels since late 2009.

In addition to the international bond issue, Iraq has introduced or is planning other fiscal measures including a local currency bond issue to banks, taxes on some consumer goods and public wage cuts. It has also been considering whether to ask for aid from the International Monetary Fund.

(Editing by Andrew Torchia)

http://www.nytimes.com/reuters/2015/04/30/business/30reuters-iraq-debt-ratings.html?_r=0



July 10th 2015  Rev - 3


Subpages (1): Iraq's Credit Worthiness
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