S&P Junks Iraqi Bond

Ratings agency S&P on 8 September assigned a B- rating to the $6bn senior unsecured bond to be issued by Iraq after a nine-year absence from the international market. The roadshow to market the bond, lead managed by Citigroup, Deutsche Bank and JP Morgan, began in London on 10 September.

S&P also assigned a B-/B long-and short-term foreign and local currency sovereign credit rating to Iraq (stable outlook). This presumes that fiscal and external deficits will not worsen beyond the current forecasts and that the war with ‘Islamic State’ will be contained. But it says that its rating on Iraq is constrained by the war, immature political institutions, and sectarian divisions between Sunni, Shia and Kurdish. Fitch also, in August, recently gave Iraq a ‘junk’ rating (MEES, 14 August).


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