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Exclusive - Iraq seeks credit rating before jumbo bond issue


k98nights
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Markets Thu Apr 30, 2015 7:02am EDT

Exclusive: Iraq seeks credit rating before jumbo bond issue
DUBAI BY HADEEL AL SAYEGH










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Iraq's Finance Minister Hoshiyar Zebari speaks during a news conference in Baghdad February 26, 2015.

REUTERS/KHALID AL-MOUSILY



 

(Reuters) - Iraq plans to obtain a sovereign credit rating and is approaching rating agencies as it prepares for a jumbo $5 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://www.reuters.com/article/2015/04/30/us-iraq-debt-ratings-idUSKBN0NL1AX20150430





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Can We Get Them A Cosigner ? :blink:

:D :D :D

***///

 

Who's gonna co-sign fer Iraq --- surely not hobummer-the-Iraq-hater !  He's more an Iran guy.... <_<

 

The Predatory-Cannibal-Klinton-Klan is rolling in international dough -- maybe they will !  :lol:

 

Wonder what 'promises' she made as SoS to Abadi & Company whilst on her whirlwind tour of the

ME to load up her personal coffers...?  <_<

***///

 

2028.... we don't have to wait THAT long, do we...?   :shrug:

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Great news K98 what a find, and with Buzzy in da house, even better. Amazing, things are quiet for a few day's, week's, then all of a sudden BANG!!!! outta the blue, something huge. This has to be the biggest adrenaline rush as of late. And, thanks Adam for chiming in, much appreciated for both.

Hey Captl1......MAS TEQUILA? ?????

Edited by Wiljor
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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)

Ya, I got laid off the end of march myself. Still have a roof over my head and I see my boy 50% of the time, I know its bad but lets be happy for the things we have right.

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Most welcome! This is HUGE news!!


Ya, I got laid off the end of march myself. Still have a roof over my head and I see my boy 50% of the time, I know its bad but lets be happy for the things we have right.

 

Lost my career after almost 20 years so an RV now would be a life saver for me!

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Ya, I got laid off the end of march myself. Still have a roof over my head and I see my boy 50% of the time, I know its bad but lets be happy for the things we have right.

my thoughts and prayers to both of you, life sucks, so take it and do the best we can.

Get hit hard get back up and ask for another

god bless 

 

davis

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Thanks you guys. I'm learning my type of career is mostly temp work. At least thats what its become. I thank you for helping me remember to keep my head up. :peace:

every job is like that now, Canada the same, they talk about all the work and jobs, they are all temp work, or shared part time

brutal, cant even get a job that is semi full time any more.

All real good paying jobs are even contract, work so many months and then laid off. This way they dont have to pay the extras cause you are

not full time, Then they hire you back in 6 months. Sucks big time

davis

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***///
 
We're old, JC123...   :( 
so like months, years...?

 

No clue, I'm not that smart or connected. I bought the currency years ago but never really believed in Iraq's government because of the infighting, or the revaluation because of the US being in control of the economic playing field (just my perception of the market)...maybe this has some validity. Only when Maliki was ousted was I even remotely intrigued.Reading the cash-in guide on the site, which I believe was copyrighted in around 2010-11 it doesn't seem dated, and everything talked about seems to be part of a bigger plan that was always in the works, who knows? It's been fun watching people here get prepared and informed. just like you, it's a gamble for me. Hopefully the man upstairs will be good to us.

Edited by Markinsa
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So we all know that Iraq is seeking the credit rating and that there is to be a jumbo bond issue. My question is timing.

The bond issue comes after the credit rating, so that investors will have some idea what the bonds are worth,

And the credit rating comes after an RV? I mean, how useful would a credit rating be for a country still using programmed exchange rates and a currency only useful inside its borders? 

If this is the case, when would the credit rating be likely assessed? You have to assume that an RV would come at or before that time.

So that might help to determine when a hypothetical RV might occur.

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every job is like that now, Canada the same, they talk about all the work and jobs, they are all temp work, or shared part time

brutal, cant even get a job that is semi full time any more.

All real good paying jobs are even contract, work so many months and then laid off. This way they dont have to pay the extras cause you are

not full time, Then they hire you back in 6 months. Sucks big time

davis

Yep.

I know the CEO with a large retailer here in Socal called  Big 5 sporting goods. They went part time because of Obamacare. Yes these were never great paying jobs. The skills needed are very minimal to run a cash register. Now they need two of these low paying jobs to make ends meet. The logistics alone makes that near impossible for many people.

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