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Baghdad has mandated three foreign banks – Citigroup, Deutsche Bank and JP Morgan Chase – to raise $6bn with an international bond, Iraq’s first in nine years.
The new issue will be marketed in three tranches, with the first sale due to take place this year, an Iraqi central bank official told Bloomberg this week. The face value of the bond was originally set at $5bn, but given the slump in projected budget revenue with the steep fall in oil prices, an increase in the issue was apparently necessary.
The oil price slump, together with an exports undershoot and the cost of ongoing fighting against so-called Islamic State has left Iraq with little choice but to tap the international debt market to cover its soaring budget deficit (see above).
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