The recent surge in sectarian violence has sent Iraq’s bond yields higher, prompting officials to postpone a planned debt sale.
Deputy Finance Minister Fadhel Nabi told Bloomberg:
“We will definitely issue new bonds, but it will take more time now with all the problems in the country.”
The news agency also reports that the yield on Iraq’s 5.8 percent dollar bonds maturing in January 2028 rose 19 basis points from the end of September to 7.8 percent, compared with a 4 basis-point decline to 5.2 percent in the average yield on regional sovereign debt.
The government’s plan for a second bond, which Nabi announced in October, is not assured. Iraq said more than two years ago, in July 2011, that it would come to market in a year to finance new infrastructure after decades of wars and economic sanctions, but it hasn’t done so.
The premium for Iraqi sovereign bonds over Treasuries has widened by 32 basis points since the end of October to 540 Wednesday; the comparable spread for Middle East government bonds fell 16 basis points to 414, according to JPMorgan.
(Bond image via Shutterstock)