KRG hires banks to arrange bond roadshow in London
REUTERS PhotoThe Kurdistan Regional Government (KRG) announced it is meeting investors in London this week, with an eye to a “potential transaction in the near future.”
“Goldman Sachs International and Deutsche Bank AG will organize a series of meetings with international fixed-income investors in London, with a view to a potential transaction in the near future,” the KRG said on its website on June 22.
These two banks first introduced KRG officials and fund managers last October. At the time the Kurdish delegation, led by the deputy prime minister, was sounding out investors about a potential debt financing, although a number of grey areas needed to be clarified. But the passage of a law to raise funds through borrowing means the KRG is now in a position to issue in the capital markets, as reported by Reuters.
The KRG in 2014 started crude exports by pipeline through Turkey as it sought to boost its financial independence from Baghdad. The Iraqi government opposes secession, along with Turkey and Iran.
The Kurdistan administration will need at least $1.4 billion in assistance to stabilize the economy after growth slowed from 8 percent in 2013 to 3 percent last year, and poverty doubled, the World Bank said in a report in February.
According to the April 2015 report published by the Kurdistan Regional Government, KRG, Ministry of Natural Resources, KRG commitments under the 2015 Federal Budget Law have been met, and oil production has reached record levels.
According to an agreement on oil export and budget, reached last December between the KRG and the Federal Government of Iraq, Kurdistan Region is committed to export 550,000 bpd (barrels per day) in return for a budget entitlement close to one billion US dollars per month to be paid by the federal government.
The agreement was approved within the framework of the Iraqi Federal Budget Law for 2015.