Exclusive - Iraq seeks credit rating before jumbo bond issue

by **dizzydee** Thu 30 Apr 2015, 12:04 pm

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Post n°1

Exclusive - Iraq seeks credit rating before jumbo bond issue

by dizzydee Thu 30 Apr 2015, 12:04 pm

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April 30, 2015

Exclusive - Iraq seeks credit rating before jumbo bond issue

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.

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by mochasmom Fri 01 May 2015, 8:51 am

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Post n°11

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by mochasmom Fri 01 May 2015, 8:51 am

So let me see, in order to do this they have to have an internationally recognized currency, which we don't have yet, but will once it revalues...then they can seek the credit rating and bond issue...right?

by **Proven** Fri 01 May 2015, 5:26 pm

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Post n°12

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by Proven Fri 01 May 2015, 5:26 pm

mochasmom wrote:So let me see, in order to do this they have to have an internationally recognized currency, which we don't have yet, but will once it revalues...then they can seek the credit rating and bond issue...right?

International recognition is one of the criteria used to determine the bond rating. It could be rated now, or later. It's importance is to determine the interest rate on the bonds. The better the rating, the lower the interest rate.

My point in posting the article was that these local bonds are mentioned as a solution to their economic crisis. These are industrial development bonds will be guaranteed by the government and funded by investors. The legislation issuing these bonds is part of the amendments to the investment law that will initiate economic development. Monetary reform will coincide with economic development.

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by **Neno** Fri 01 May 2015, 6:27 pm

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Post n°13

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by Neno Fri 01 May 2015, 6:27 pm

OK, sounds like you know what your talking about.
Isn't this the way it works in the real world?

by **Proven** Fri 01 May 2015, 10:18 pm

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Post n°14

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by Proven Fri 01 May 2015, 10:18 pm

Neno wrote:OK, sounds like you know what your talking about.
Isn't this the way it works in the real world?

yes.

by Screwball Sat 02 May 2015, 2:48 am

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Post n°15

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by Screwball Sat 02 May 2015, 2:48 am

Proven wrote:

mochasmom wrote:So let me see, in order to do this they have to have an internationally recognized currency, which we don't have yet, but will once it revalues...then they can seek the credit rating and bond issue...right?

International recognition is one of the criteria used to determine the bond rating. It could be rated now, or later. It's importance is to determine the interest rate on the bonds. The better the rating, the lower the interest rate.

My point in posting the article was that these local bonds are mentioned as a solution to their economic crisis. These are industrial development bonds will be guaranteed by the government and funded by investors. The legislation issuing these bonds is part of the amendments to the investment law that will initiate economic development. Monetary reform will coincide with economic development.

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So where are we at with the investment law?.. Wasn't the third reading supposed to be Thursday?...and what no mention?

by **Proven** Sat 02 May 2015, 6:06 am

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Post n°16

Re: Exclusive - Iraq seeks credit rating before jumbo bond issue

by Proven Sat 02 May 2015, 6:06 am

So where are we at with the investment law?.. Wasn't the third reading supposed to be Thursday?...and what no mention?[/quote]

I have not seen anything yet.