DEAL: Iraq’s first independent sovereign bond

Author: Lizzie Meager | Published: 10 Aug 2017

The Republic of Iraq has sold its first ever unsupported notes in the international capital markets, raising $1 billion.

The deal brought in $6.6 billion worth of orders - evidence of a yield-hungry investor base with a sustained appetite for risky emerging market debt.

The government had attempted to tap the international capital markets in 2015 but during the roadshow oil price fluctuations caused the yield to rise to an uneconomic level. The oil price drop combined with increasing war-related spending in the government’s battle against the Islamic State (IS) meant that deal was eventually abandoned.
But since then a stand-by arrangement has been in place between Iraq and the IMF, providing front-loaded funding over a three-year period from 2016.
"The challenges two years ago were the same as the challenges today," said Gamal Abouali, partner at Cleary Gottlieb who advised the Republic of Iraq on the issuance."The difference in...



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