Benefits of Iraqi bonds is the highest of its kind ever

09/19/2015



Baghdad / term

An international report revealed that Iraq would not find buyers for its bonds only if you pay very high returns, while allocated Standard & Poor's rating (-B) credit for Iraq this month, no fewer than six degrees of classification investment institution said that the risks related to security and institutions in Iraq among the highest level between all the countries that institution shall be classified on a par with Egypt and Greece never two.

And confirms the economic expert, Dr. Maytham coffee that Iraq will lose the safety conditions in the long term attributing the cause to Baghdad to sell oil commodity exchange, which deteriorate the conditions, as opposed to industrial goods, which keeps prices high.

The coffee in an interview with the "long" on Friday, said that "Iraq faces constantly decline in revenue, as opposed to increasing expenses and fugitive for several reasons, including security and military problems, adding to the chaos in consumer spending, waste, corruption and poor planning, which is what causes the growth of the real deficit in the budget, which is financing this deficit of borrowing requires either internal or external. "

Baghdad and organized a promotion to investors last week for a series of dollar-denominated sovereign bond issues, which hopes through which you can measure up to six billion dollars.

He adds coffee, that "borrowing, especially bonds dollar, arrange long financial burdens term on the economy, both at the origin of the loan or the benefits of it, which means that we in the long term we will enter again to bear the burden of the debt, as the oil resources, even if increased prices, part of which will go to pay off these loans and their burden, and the most difficult is that these loans go to finance consumer spending, which means we are in front of a dangerous issue is rotate the resources of the industrialized countries to us and then return to them. "

The international report has confirmed the approaching return swaps in exchange for Iraqi commitment to ensure the five-year used in the insurance of sovereign debt defaults from its highest level in almost six years if the risk rose 77 basis points to 576 basis points.

He continues economist that "the deterioration of the security and military situation as well as Iraq's dependence on oil, which is very dangerous commodity on the economy, led Iraq to be located within what is known as sovereign risk, which I have not had granted only Rating B-, which is low evaluation because it means that Iraq It faces problems of not being able to repay.

It maximizes internal risk the instability of the global market environment and the trend is expected to begin to raise US interest rates may be starting this month.

However, reducing the risk of potential oil industry unit in Iraq's second-largest oil producer in OPEC.

Iraq has raised Gnteg crude oil to 3.8 million barrels a day in June from 3.05 million barrels per day a year earlier.

Among the factors that work to slow down the increase in oil production, bureaucratic hurdles and security concerns and inadequate pipes and storage capacity lines.

Said Ram Mohan, director at Abu Dhabi Investment Authority, which holds the review of the bond issue prospectus before deciding on the decision to invest in this version, "Iraq now has foreign exchange reserves approaching $ 65 billion and that is sure to contribute to the rise in production in increased even further."

So fund managers say that Iraq will not find buyers for its bonds only if you pay very high returns.

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