Norway Opens Wealth Fund to Buying Iranian Government Bonds

Updated on
  • Exclusion for government bonds now includes North Korea, Syria
  • Investors looking at yields of more than 20% in Iran bonds

Norway opened its $810 billion wealth fund to Iranian government bonds as the Middle Eastern nation emerges from almost a decade of international sanctions following a deal to curb a nuclear program.

Norway has had sanctions in place on investing in Iranian government bonds since January 2014 as part of a ban that now will include only North Korea and Syria, according to a statement from the Finance Ministry in Oslo. The ban was lifted as Iran met its initial obligations under the Joint Comprehensive Plan of Action, the ministry said.  

“As part of this easing the prohibition against buying Iranian government bonds falls away,” Norway said.

Iran may be a perfect fit for the world’s biggest wealth fund, which has been expanding in emerging markets as it seeks to boost returns. Iran’s economy is growing faster than almost any other in the Middle East and its bonds pay twice as much as Russia’s and Turkey’s. Yields exceed 20 percent on about $4.5 billion of short-term securities sold by state and private borrowers in Iran.

The allure of Iran’s debt market is also likely to grow as the country moves closer to securing credit ratings that will allow it to issue Eurobonds. Fourteen years after Moody’s withdrew its speculative score of B2, the government said it’s talking to international ratings firms for new grades.

Norway’s wealth fund doesn’t comment on investments in individual markets, said Line Aaltvedt, a spokeswoman.