Iraq has issued its first ever internationally sold sovereign bond in an effort to integrate itself into the international capital markets.
The $1 billion deal, which is guaranteed by the US Agency for International Development (USAID) will be used to plug the frontier market’s budget deficit prompted by the sustained drop in oil prices. In many ways it resembles a US Treasury, but with a slightly higher yield.
The USAID’s press release says the guarantee ‘underscores the strong and enduring commitment of the US to support the government of Iraq in this critical moment in the fight against Daesh’.
“Given the challenges Iraq is facing with Isis and large numbers of displaced people the US government wanted to provide credit support so that Iraq could raise funds at a preferential rate,” said Gamal Abouali, partner at...