billion euro offering to help finance Iran’s natural gas projects, the Oil Ministry reported.
It was only the third foreign currency bond ever sold by the Islamic Republic.
The Majlis granted the National Iranian Oil Company (NIOC) the right to issue 5 billion euros in bonds. The Central Bank of Iran will supervise the bonds, and Iran’s few bank branches abroad will market them, not international banking houses as in the past..
Most of the funds raised will be used to develop Phase 15-18 of the South Pars gasfield in the Persian Gulf. This field is the largest gas complex in the world and is shared by Iran and Qatar.
The head of Bank Mellat’s international department, Saeed Ghaffari, was optimistic about how receptive international buyers will be.
“It is expected that the whole amount of 250 million euros will be sold by the end of [March 10],” he said during that day. “The clients were mainly from the Persian Gulf states as well as some Asian countries, like Japan and Malaysia,” he added. No figures on sales were issued at the end of Wednesday—or on any of the 20 days since then.
The original plan was to sell the bonds in four installments of 250 million euros each, but Ghaffari said demand is so firm that the remaining 750 million euros may be issued in one more installment after Now Ruz. Originally, the bond issuance was supposed to be divided over a 120-day period and four installments.
This sale is only the third time the Iranian government has offered euro bonds since the 1979 Islamic Revolution. Iran issued 625 million euros worth of bonds in early 2002 and another 375 million euros in December 2002. Its last eurobond matured in April 2008 and Fitch, a global rating agency, said it would no longer rate Iranian bonds after that.
As Iran may be subjected soon to a fourth round of U.N. sanctions, some were wary of the risk of the new bonds. Residents in the United States—green card holders, refugees, students and so on—cannot buy the bonds because a 1995 investment embargo forbids residents of the U.S. to engage in financial transactions with Iran.
NIOC Vice President Hojatollah Ghanimifard is not worried.
“As you know, the sanctions that the United States has imposed against Iran are unilateral sanctions. We are going to distribute these bonds in countries where their laws and regulations would not be preventing investors from buying our bonds,” he told PressTV Sunday. “So I don’t think the unilateral sanctions of the United States are going to be affecting this market for us.”
The bonds’ dividend rate is set at six percent for one-year ownership, seven for two years and eight for three years. A 5.5 percent return will be awarded those who hold the bond for less than a year. The NIOC said there is no risk involved in the investment, reported PressTV.