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Exclusive - Iraq seeks credit rating before jumbo bond issue

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Business Thu Apr 30, 2015 11:56am BST

 

 
Exclusive - Iraq seeks credit rating before jumbo bond issue

 

DUBAI BY HADEEL AL SAYEGH

 

 

(Reuters) - 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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Don't they need an international  currency first?

I thought the samething?  Something is going on for sure.....

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Don't they need an international  currency first?

 

That's what I'm thinking!! This sounds like great news!

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Great Find Woody!!! This is Huge!!!

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Great Find Woody!!! This is Huge!!!

 

I think it's the biggest story in a long time.... Credit Rating is HUGE!!  :backflip:  :backflip:  :backflip:

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***///

 

...and the article IS from REUTERS - mouthpiece for TPTB... so it looks like somethin' is happenin'...!

Hopefully it'll be the catalyst for something GREAT for US !  :tiphat:

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***///

 

...and the article IS from REUTERS - mouthpiece for TPTB... so it looks like somethin' is happenin'...!

Hopefully it'll be the catalyst for something GREAT for US !  :tiphat:

 

That's what I'm hoping too. I called Adam to let him know!

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That's what I'm hoping too. I called Adam to let him know!

 

Sorry for the language when I picked up the phone... last time you called I think it was because the server was down.

 

This is awesome news - great find!!!!

 

:twothumbs:

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That's what I'm hoping too. I called Adam to let him know!

***///

 

Nice job, K98 !   :twothumbs: When it comes to the machinations of world monies, we do pay attention to REUTERS.

***///

 

'BUZZY' MONTANA's got that BUZZ again, kids !   :lol:  :D

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Sorry for the language when I picked up the phone... last time you called I think it was because the server was down.

 

This is awesome news - great find!!!!

 

:twothumbs:

 

It's all good... Hahahaha!!!  Thank you sir!

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I think it's the biggest story in a long time.... Credit Rating is HUGE!!  :backflip:  :backflip:  :backflip:

Come on woody, light that cigar up. Its time. lol, lets hope so.

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Come on woody, light that cigar up. Its time. lol, lets hope so.

 

I just did!! HAHAHA!! Adam's in the chat room for all interested

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:cigar::cigar: I'm SO looking forward to NOT having to sqeeze cigars into my budget! :bravo: (being laid off sick SUCKS) Edited by olivesman
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i must say, great article, 

maybe it will help me with my credit rating soon

 

thanks for the hard work and articles to all of you

 

:cigar:

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BIG step forward.!

Go Credit rating

Go Moody's

Go Standard and Poor's

Go Fitch

Go Iraq

Go dinar

Go $1+

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Thx Woody - Here's A Related Article I Posted In Another Thread ! ;)

It Looks Like Iraq Is Trying To Get Their Big Boy Pants On ! :o

:D:D:D

Here's A Highlighted Version - Thx Brother Yota ! ;)

B)B)B)

(by walkingstick)

Finance Minister: Iraq is seeking to obtain a sovereign rating

30/04/2015 04:21 |

BAGHDAD / Source News / .. Finance Minister Hoshyar Zebari, on Thursday, that his country isseeking a sovereign rating and continue with the credit rating agencies as it prepares to issue huge bonds worth five billion dollars needed to cover the budget caused by lower oil prices deficit.

Zebari said in an interview I followed Agency / Source News / "We started the process, banks are also seeking to help us in this direction."

Iraq has announced that it will issue bonds worth five billion dollars in the first issued in the international bond market nine years ago, in particular, and he desperately needed to liquidity as the government predicted that this year's deficit up to about 25 percent of the budget of 100 billion dollars, almost the size.

And obtain a sovereign rating from a major credit agency which Iraq currently lacks him may help persuade the international fund managers and international banks in underwriting bonds.

Zebari said that "Iraq is seeking to connect with two or three credit rating agencies, but he did not identify, discuss Iraq and bond issuance plan with City Bank and Deutsche Bank."

The process of obtaining the credit rating may be sensitive for Iraq as it will be forced to open its books to these institutions reveals revealed new information on public finances.

Zebari did not disclose the date on which it is expected to complete the process.

It is expected to attract Iraq's oil reserves huge -alta it did not reach the hands of Daash- buyers for this offering.

But many fund managers believe that Baghdad would face difficulty in the sale of five billion dollars in a short period even if the generous pricing.

In response to whether the number five billion to be very ambitious, Zebari said "We have a commitment in the budget to issue six billion, so this is the minimum this is our plan to cover the deficit, but there is no way to be issued in a single chip."

Iraq has an existing issue of dollar bonds maturing in 2028 and prompted a wave of panic selling late last year with the erosion of oil prices return on these bonds to rise to a record high of 10.49 percent from about 7.2 percent in September. But the yield has since tumbled to 8.04 percent.

In addition to the issuance of international bonds Iraq has taken or plans to take other financial measures, including the issuance of bonds in local currency to the banks and the imposition of taxes on some consumer goods and reduce public sector salaries Fifi, also asked the help of the IMF Ata.anthy Looking T.

http://l-news.net/index.php/economy/78237.html

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I just did!! HAHAHA!! Adam's in the chat room for all interested

Chat room? .. Does it still exist because on my DV site the chat room has been gone for weeks

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