'The bond will extinguish the claims of most large private sector creditors on Iraq. It will fulfil a major goal of the interim government,' Allawi said.
Banks and foreign suppliers, including multi-nationals such as Hyundai, have around $20 billion in debt on Iraq, mostly dating from the 1980s, when Iraq was fighting Iran and its economy was on a war footing.
Under a deal reached with large private sector creditors in Singapore last month, creditors agreed to swap 20 per cent of their principal and interest for a bond and cancel the rest, Allawi said.
The 20-year bond, which is being arranged by Citigroup and JP Morgan, will carry a coupon of 5.8 per cent and is likely to be listed in Europe for trading, he said.
Around 80 per cent of creditors with smaller claims on Iraq, typically under $35 million, have agreed to take a 12.5 per cent cash payment of principal.(Source) TradeArabia
