Iraq plans to sell $2 billion in bonds
Iraq plans to sell $2 billion in bonds
Iraq would like to see the yield drop to 5 percent from the 11 percent investors originally demanded, Gov. Ali Al-Alak said. The sale could be managed by banks including Standard Chartered, Deutsche Bank and Citi, he said.
Iraq had called off a sale of US dollar-denominated bonds in October 2015 rather than pay the 11 percent yield. It revived those plans in December 2015.
Iraq last sold debt internationally in 2006, when it issued about $2.7 billion of bonds due in 2028 with a coupon of 5.8 percent. Those bonds now trade around 70 cents on the dollar, for a yield of 11.66 percent. Standard & Poor's rates Iraq's long-term credit at B-, six notches below investment-grade. But Iraq hopes to get $15 billion to $16 billion in loans over the next two years from the International Monetary Fund, the World Bank and members of the Group of Seven leading industrialized nations, Al-Alak said.
About $7 billion should come in between June and December, and Iraq may also get US and World Bank borrowing guarantees to cover the planned bond sales, he said.
The IMF said at the end of March said it might approve as early as June a standby arrangement unlocking $15 billion in international assistance over the next three years.
"Any progress" with the IMF "will give positive marks for the market that will help to deal with the bonds' issue," Al-Alak said.
"Besides, several guarantees from the US or the World Bank will help to reduce the interest rate," he said. "Five percent to 6 percent will be reasonable. If we can get this kind of guarantee, we might even get less than that."
Iraq is seeking international support after a collapse in oil prices two years ago caused its revenue to drop — the government relies on oil for 95 percent of its income.
With oil prices falling and the war intensifying, Iraq's economy shrank by 2.1 percent last year, the IMF said. Debt is expected to reach 77 percent of gross domestic product this year.
Iraq plans to implement measures to reduce spending and increase revenue by raising electricity prices and income taxes to facilitate an IMF loan of $6 billion by next June, the central bank governor said.
"There are a few items we have to work on right away," he said. "We have to get an approval from the council of the ministers as soon as possible, before June at least."
The country also hopes to get $4 billion from the World Bank and $3 billion to $5 billion at meeting of the G-7 due next month in Japan, he said. "There is good hope that we will get some support from that meeting — it is on their agenda," he said.
Can a hungry Mali turn rice technology into ‘white gold’?
- Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change
- Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983
BAGUINEDA: When rice farmers started producing yields nine times larger than normal in the Malian desert near the famed town of Timbuktu a decade ago, a passerby could have mistaken the crop for another desert mirage.
Rather, it was the result of an engineering feat that has left experts in this impoverished nation in awe — but one that has yet to spread widely through Mali’s farming community.
“We must redouble efforts to get political leaders on board,” said Djiguiba Kouyaté, a coordinator in Mali for German development agency GIZ.
With hunger a constant menace, Malians are cautiously turning to a controversial farming technique to adapt to the effects of climate change.
Dubbed the System of Rice Intensification (SRI), the new method was pioneered in Madagascar in 1983. It involves planting fewer seeds of traditional rice varieties and taking care of them following a strict regime.
Seedlings are transplanted at a very young age and spaced widely. Soil is enriched with organic matter, and must be kept moist, though the system uses less water than traditional rice farming.
Up to 20 million farmers now use SRI in 61 countries, including in nearby Sierra Leone, Senegal and Ivory Coast, said Norman Uphoff, of the SRI International Network and Resources Center at Cornell University in the US.
But, despite its success, the technique has been embraced with varying degrees of enthusiasm. Uphoff said that is because it competes with the improved hybrid and inbred rice varieties that agricultural corporations sell.
For Faliry Boly, who heads a rice-growing association, the prospect of rice becoming a “white gold” for Mali should spur on authorities and farmers to adopt rice intensification.
The method could increase yields while also offering a more environmentally-friendly alternative, including by replacing chemical fertilizers with organic ones, he said.
He also pointed out that rice intensification naturally lends itself to Mali’s largely arid climate.