Previously, the government has marketed rial bonds inside Iran and eurobonds abroad.
Ahmad Qalebani, managing director of the National Iranian Oil Co. (NIOC), announced Saturday that the Central Bank had authorized the eurobonds to be sold at bank branches across the country.
The new policy appeared to be recognition that many Iranians do not trust their national currency and are reluctant to buy rial bonds. Rial bonds have been available for several years and the regime has always claimed they were very popular.
Qalebani said the new eurobonds would go on sale March 12 in Bank Saderat, Bank Tejerat and Bank Sepah. He said the smallest face value on the bonds would be 1,000 euros ($1,400). So, it does not appear the NIOC is trying to pull in funds from the middle class.
Oddly, Qalebani did not reveal the total valuation of the bonds to be sold. That may suggest the regime is testing the market to see how much it can sell.
Foreign investment in Iranian oil and gas projects has largely collapsed and the regime is looking around for new ways to raise capital. The Oil Ministry is saying that the five-year plan that started last Now Ruz calls for a total of $210 billion in investment in the industry.
Qalebani said the profit rate on the bonds was being published as 8 percent. Deputy Oil Minister Mohsen Khojasteh-Mehr said, “As the price of crude oil rises, so does the profitability of these bonds.” He did not mention that as the price of crude falls, so will the profitability of the bonds.
Under Islamic banking, no interest is paid on bonds. Buyers effectively become shareholders and share in the profits or losses of the bond issuer.