EconSource: Iraqi Kurds Seek to Attract Investors Through Bond Sale

The Kurdistan Regional Government (KRG) is planning to raise cash through its first ever bond sale. The bond seeks to fill a gaping hole in the KRG’s finances due to weaker oil-sale revenues amid an increasingly costly battle with the Islamic State (ISIS or ISIL). The government’s budget deficit is expected to reach $5 billion this year for the second year in a row. The KRG held fixed-income investor meetings this week in London, organized by Deutsche Bank and Goldman Sachs International, to gauge appetite for the energy-rich region’s debt. KRG officials are also meeting big institutions and frontier-market investors and will complete the size of the bond depending on demand. [Wall Street Journal, 6/25/2015]

Turkey’s first nuclear plant gains investment green light
Russia-owned Rosatom, the company slated to run Turkey’s first nuclear power plant, has won a preliminary license for the next three years allowing it to make necessary investments. Turkey in 2013 commissioned Rosatom to build four 1,200 megawatt reactors. Construction is expected to begin at the end of 2016, some eighteen months later than originally planned. Regulatory hurdles and Russia’s financial woes have slowed the $20 billion project’s progress, pushing back the start date until 2022. Aiming to curb annual energy import costs of about $50 billion, Ankara hopes that at least 5 percent of its electricity will be nuclear generated in less than a decade. [Reuters, 6/25/2015]

Egypt’s Banque Misr in talks with banks for dollar loan
Banque Misr, Egypt’s second largest state lender, has invited banks to pitch for arranger roles on a potential dollar-denominated syndicated loan, banking sources said on Thursday. National Bank of Egypt, the biggest state-owned bank, is already in the process of arranging a $390 million thirty-seven month syndicated loan. Sources said it was looking for a three year loan and had sought feedback from banks by the end of June. Banque Misr is close to finalizing which banks will arrange the loan, hoping to complete the deal this year. Sources added that the lender is expected to raise around $300 million. [Reuters, 6/25/2015]

US fund managers say slow start after Saudis open stock market to foreigners
One week after Saudi Arabia opened its stock market to direct foreign investment, US mutual fund managers say they are interested but not rushing to invest in the Middle East’s biggest economy. Foreign fund inflows are slower than initially expected, in part because US fund companies like Fidelity and Harding Loevner are digesting numerous regulations set forth by the Saudi Capital Market Authority for participation in the $575 billion market. According to Fidelity, the investment stage will come in the next several months. Tadawul chief Adel-al-Ghamdi said that six applications from foreign investors for participation in the market are being processed, but only Ashmore Group and HSBC Holdings have been granted licenses so far. [Reuters, 6/25/2015]

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