Syria is headed towards economic collapse after four years of war, which could serve as a catalyst for the the fall of the Syrian regime, a report published today by Chatham House says. The report found that Syria’s economy has retracted by over 50 percent in real terms, the Syrian pound has lost 80 percent of its value, and inflation has averaged 51 percent. Meanwhile, outward migration and an estimated 250,000 deaths have caused Syria’s population to fall by more than 15 percent. In addition, agriculture now accounts for a greater percentage of the nation’s overall output as the energy and manufacturing sectors declined sharply. Overall food production has also declined. Ultimately, a “war economy” has developed in which actors have established independent economic spheres. Reliance on international aid has also increased. [The Independent, 6/23/2015]

Iraq aims to meet with investors by end of July for $5 billion bond issue
Iraq hopes to meet investors by the end of July to present plans for a $5 billion bond issue, the country’s Finance Minister Hoshiyar Zebari said on Monday. The government has hired JP Morgan, Citibank, and Deutsche Bank to arrange its first debt sale in nine years to cover its budget deficit. Iraqi officials met with the banks and credit rating agencies on June 16, Zebari said. Analysts believe it might be difficult for the market to absorb $5 billion of debt from Iraq in a short space of time. Obtaining a credit rating from a major agency would be one step towards market acceptance. [Reuters, 6/22/2015]

National Bank of Egypt picks banks for potential benchmark bond
The National Bank of Egypt (NBE), the oldest commercial lender in the country, has chosen five banks to arrange fixed income meetings starting on Wednesday for a potential benchmark US dollar-denominated bond issue (benchmark size is usually taken to mean at least $500 million). NBE, which expects to be rated B-/B by Standard & Poor’s and Fitch, chose Citigroup, Deutsche Bank, HSBC, National Bank of Abu Dhabi, and Standard Chartered Bank as joint lead arrangers for the meetings. The meetings will be held in the Middle East and Europe and the bond may be issued in 2015, depending on market conditions. [Reuters, 6/23/2015]

Moody’s says Tunisia benefits from successful democratic transition
Tunisia’s Ba3 stable credit profile continues to benefit from the country’s democratic transition and improved funding environment, Moody’s Investors Service said in its annual Credit Analysis for the Government of Tunisia. The agency said that while Tunisia’s fiscal and external imbalances are expected to decrease over the next two years, its rating is constrained by investment and growth challenges stemming from regional disparities and labor market inefficiencies. Implementation of structural reforms recommended by the International Monetary Fund could contribute to a more positive rating. [CPI Financial, 6/23/2015]

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