Iraq Plans Bond Sales This Month to Cover $20 Billion Budget Gap

  • Issuance to include local and foreign debt, PM adviser says
  • Securities for overseas investors to be offered in tranches

Iraq plans to sell bonds in domestic and international markets beginning this month to fill an annual budget gap forecast to swell to 24 trillion dinar ($20 billion) after oil prices plunged.

Domestic instruments will include 5 trillion dinars to public investors and $6 billion in treasury bills to banks, Mudher Saleh, adviser to Prime Minister Haidar al-Abadi, said in an interview Thursday. Debt to international buyers will be offered in tranches, he said without providing details on the amount.

“We will do what has been stated in the budget law to cover deficit by issuing domestic and foreign bonds,” Saleh said by phone from Baghdad.

Iraq, which has the world’s fifth-largest oil reserves, is facing a deficit this year which it plans to cover by borrowing from the International Monetary Fund, Islamic banks and bond sales. The country is grappling with oil selling at the lowest prices since 2004 and a war on Islamist militants who seized a swath of the country’s northwest.

The government appointed Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co. for its first international bond issue in a decade to raise $6 billion, Muneer Mohammed Omran, director general of the central bank’s investor department in Baghdad said last August.

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