KTFA:
Frank26: Allow me to rapid fire some postings right now in preparation of tonight's MONDAY CC
KTFA FAMILY ......... Little to nothing is told to You about #1 because IMO we have it. #2 is being born right in front of Your eyes!!!
But the ends are not Ripe Yet. Sooooooooooo .......... How is #3? IMO ........ Like You and i ........ Excited.
Where do i share the most?
At the pre start ...... During or after we turn off the Live Stream? IMO ........... All of this Encompassed Time.
Aloha Monday KTFA Family .......... Lets Learn together tonight......
KTFA Frank
....
Frank26: Allow me to rapid fire some postings right now in preparation of tonight's MONDAY CC
KTFA FAMILY ......... Little to nothing is told to You about #1 because IMO we have it. #2 is being born right in front of Your eyes!!!
But the ends are not Ripe Yet. Sooooooooooo .......... How is #3? IMO ........ Like You and i ........ Excited.
Where do i share the most?
At the pre start ...... During or after we turn off the Live Stream? IMO ........... All of this Encompassed Time.
Aloha Monday KTFA Family .......... Lets Learn together tonight......
KTFA Frank
....
*************
Frank26: i blame the eclipse .......lol
BUT ............ My Lions have something in common with the CBI.
Trying to lift three 000's ........... We are 0 - 3 !!!
KTFA Frank
**************
cleitus :Looks like the banks are joining us in the Long Line.
Frank26: Actually it is these Iraqi Banks ......... And there are now a few of them .......... That are opening up and will cause Iraq's MR to .......... Open Up Too.
In other Keywords ........... It will start to dismantle the LL.
SAID IMO ................. " the rest of 2015 is to set up the banks in Iraq for DRS's MR in conjunction with the New Laws ......"
the GOI did yesterday for today.
They are busy preparing and passing LAWS.
KTFA Frank....... Are they on vacation? LOL.......... If You want them to be. lol
************
NanaCarol: UN SCHEDULED SPEAKERS TODAY, etc. Secy Gen'l opening today 9/28
http://gadebate.un.org/
Walkingstick: SNIPPET...............
Below is from FNC’s Jonathan Wachtel
9/26/15 at 7:48 am
—For Planning Purposes Only— Subject to Change
Wednesday, September 30
UNGA DEBATE
11:45 Palestinian Authority President Mahmoud Abbas
12:15 Turkish Prime Minister Ahmet Davutoglu
13:00 Pakistan Prime Minister Nawaz Sharif – expect criticism of US use of drones
19:30 Libyan President Mohamed Magariaf
20:45 Iraqi Prime Minister Haider al-Abadi
http://ift.tt/1MvVVv3
Frank26: i blame the eclipse .......lol
BUT ............ My Lions have something in common with the CBI.
Trying to lift three 000's ........... We are 0 - 3 !!!
KTFA Frank
**************
cleitus :Looks like the banks are joining us in the Long Line.
Frank26: Actually it is these Iraqi Banks ......... And there are now a few of them .......... That are opening up and will cause Iraq's MR to .......... Open Up Too.
In other Keywords ........... It will start to dismantle the LL.
SAID IMO ................. " the rest of 2015 is to set up the banks in Iraq for DRS's MR in conjunction with the New Laws ......"
the GOI did yesterday for today.
They are busy preparing and passing LAWS.
KTFA Frank....... Are they on vacation? LOL.......... If You want them to be. lol
************
NanaCarol: UN SCHEDULED SPEAKERS TODAY, etc. Secy Gen'l opening today 9/28
http://gadebate.un.org/
Walkingstick: SNIPPET...............
Below is from FNC’s Jonathan Wachtel
9/26/15 at 7:48 am
—For Planning Purposes Only— Subject to Change
Wednesday, September 30
UNGA DEBATE
11:45 Palestinian Authority President Mahmoud Abbas
12:15 Turkish Prime Minister Ahmet Davutoglu
13:00 Pakistan Prime Minister Nawaz Sharif – expect criticism of US use of drones
19:30 Libyan President Mohamed Magariaf
20:45 Iraqi Prime Minister Haider al-Abadi
http://ift.tt/1MvVVv3
Backdoc: Iran To Issue Bonds Secured Against Reserves
As Iran seeks to finance the development of its oil and gas sector, Tehran plans to issue attractive local bonds while eyeing a return to the global sovereign bond markets
As we approach the widely-anticipated removal of United Nations sanctions on Iran on or around June 30, the final part of Tehran’s post-sanctions strategy was flagged last week with the low-key, and largely overlooked, announcement that it is to issue 50 trillion rials (US$1.7 billion) in local currency-denominated bonds this Iranian calendar year (ending in March 2016).
It is not that the proceeds of the issue are to be primarily used to help fund enhanced recovery and preservation projects with focus on the giant South Pars gas field, though, that is of interest to global financial market players. Rather, it is what the issue itself signals about Iran’s plans on how to finance its overall development once sanctions have been removed that many in the markets regard as momentous.
“This type of good-sized local currency issuance is precisely what countries do when they are looking to re-enter the global sovereign bond market after a notable absence,” Jeremy Stretch, head of markets strategy for CIBC, told NewsBase. “It allows them to gauge the buzz that is generated once the news is fully absorbed by potential global investors, and also to get the engine of its capital markets infrastructure back into gear,” he added.
In fact, ever since the realisation grew in Tehran’s corridors of power that, with the Western-friendly President Hassan Rouhani in place, the West’s longstanding sanctions against Iran over its nuclear programme may soon be removed, plans to resuscitate Iran’s capital markets have moved quickly and are now at a remarkably developed stage, according to NewsBase sources.
“The key catalyst for Iran was when Rouhani received that first phone call from [US President] Barack Obama [on 27 September 2013], the first time that a US leader had spoken with an Iranian president since the [Islamic] Revolution threw out the [US-backed] Shah in 1979,” Mahmood Khaghani, former director general of the National Iranian Oil Co. (NIOC) and director for Caspian Sea Oil and Gas Affairs in the Ministry of Petroleum, told NewsBase.
“From that point onwards, we have been gearing up to ensure that we can get back into the global oil and gas markets at good capacity, generating working cashflow from boosting our petrochemicals output, and working out how to broaden and deepen our capital markets in order to ensure that there is a big pool of private finance available to realise all of our plans over time,” he added.
Going local
With targets of increasing crude oil production to at least 3 million barrels per day by the end of this Iranian calendar year (and then to 5.7 million bpd by 2018), natural gas production up to 1 billion cubic metres per day by 2018, and petrochemical production to 180 million tonnes per year (tpy) by the end of 2022, it is estimated that Iran will require US$150-550 billion in new capital to achieve these levels (the amount varying according to timeframes for completing key projects).
The problem in raising this capital as it currently stands is that opportunities in the domestic stock market remain, and are likely to remain, extremely limited, given the structure of many of the major weighted institutions listed.
“Many of the most heavily weighted companies are quasi-government institutions that came into existence to serve a specific government purpose, were heavily financed by the state, and now have large debt burdens with the banks,” Mehrdad Emadi, senior economist for risk analysis and energy derivatives markets consultancy, Betamatrix, told NewsBase.
“In turn, the banks and other financial institutions had been directed by the government to make these loans to the quasi-state vehicles at extremely preferential rates so they as well have heavy debt burdens, and the upshot is that the stock market cannot fund the type of money needed for Iran’s plans, and a fresh new pool of capital is required,” he added.
Investing in local currency bonds issued by either of the big state hydrocarbons firms – the National Iranian Oil Co. (NIOC) or the National Iranian Gas Co. (NIGC), with the implicit government guarantee that the paper would carry – is likely to appeal both to those international oil companies (IOCs) who are eyeing bigger, direct investment into Iran’s oil and gas fields, and to those who want to take a more limited risk exposure to Iran in the early days of its post-sanctions recovery.
“The big bold firms that are ready now to put their money into a particular field would regard this type of bond issue as a good way of hedging risk exposure to the downside of any one direct investment by effectively spreading capital risk over Iran’s hydrocarbons sector in general,” Sam Barden, CEO of Middle Eastern fund manager, SBI Markets, told NewsBase. “Smaller firms or the less bold majors may like the idea of getting involved in any nascent Iranian boom at the early stages but want to limit overall risk,” he added.
Meanwhile, Ildar Davletshin, head of oil and gas research for the Moscow-based investment bank, Renaissance Capital, told NewsBase that getting involved early on, as well, in whatever size, would also allow firms to judge how efficiently the resultant bond funds were utilised by the government towards their original intended purpose – “or whether they would wind up being frittered away on a range of non-oil and gas projects, like happened with [Venezuela’s] PDVSA” – and, at least as important, would afford participating firms preferred bidding status for future offers, be they in local currency- or foreign currency-denominated.
A wealth of options
Given Iran’s lack of a sovereign debt credit rating over the past few years, it might seem that the chances of it launching any successful bond issues would be slim at best, but the Iranians have been working on three strategies to ensure that any such landmark issues would meet with extraordinary investor demand, initially from the Far East and then from the major EU countries.
The first of these is to ensure that for issues denominated in rials the return is guaranteed at suitably high coupon rate, over and above that which might be expected to be offered from a B/B+ rated sovereign (which Iran was just prior to its ratings being removed owing to sanctions), according to Emadi.
“There is a lot of investable money both in Iran and with Iranians abroad [Dubai alone is home to around 500,000 Iranians who saw their bank accounts shut down under the sanctions regime] that for reasons mentioned earlier will not go into the stock market but is looking for better than deposit rate bank account returns,” he said.
“It may be that these domestic currency bonds are issued by the NIOC or the NIGC but in effect they will be sovereign bonds but at a higher corporate bond rate yield level, and this would allow Iran’s firms and banks to repair their balance sheets ahead of a growth push,” he added.
Strategy two – at the very advanced stage of completion – NewsBase understands from a number of sources close to the Iranian administration – the issuing of bonds, also in rials, but – crucially for potential foreign buyers – carrying with them the option not only to be redeemed in rials but in any major currency (US dollars, Euros, Japanese yen, British Sterling, and Swiss francs) that a buyer prefers at the prevailing spot rate of the day the buyer decides to redeem the paper.
“This is really a cutting edge idea for bond issuance, but Iran is pressing ahead with this strategy as we speak, and it will offer huge assurance to potential buyers that not only are the bonds liquid but also that any adverse currency risks [from effectively holding rials] does not arise,” said a Middle Eastern legal source.
Finally, and perhaps even more astonishing than multiple currency option idea is not only that one of the currencies on offer for redemption will be the Chinese renminbi, but also that several major international bond issues are planned by Iran, with the Peoples Bank of China (PBOC) in Beijing acting as sole lead underwriter and principal distributor of the bonds.
“The structure will be that the Iranian government, or state vehicle, will issue a bond through the PBOC, which will be backed by the Chinese central bank, either in renminbi or another currency pegged at a specific rate to the renminbi, and the PBOC will then distribute them simultaneously to the Central Bank of the Republic of China (Taiwan) in Taipei, and the Monetary Authority of Macao,” said the Middle Eastern source.
Riding the currency
On the one hand, he added, the risk for the Chinese in this structure will be minimal, as all of the international sovereign issues will be backed fundamentally by some of the world’s largest hydrocarbons reserves, while, on the other hand, the upside is huge, as it will promote the use of the renminbi as one of the world’s truly international currencies, which China regards as befitting its standing on the world stage.
“China has recently been pressing the IMF again on the renminbi being included as one of the currencies used in its Special Drawing Rights [SDRs, the world’s supplementary foreign exchange reserves, their value based on a basket of key international currencies reviewed by IMF every five years, and currently comprised of US dollars, Euros, Yen, and Sterling], so having a vast amount of bonds coming from one of the world’s top energy sources being denominated and traded in renminbi would be a big step for the Chinese in realising this ambition,” said the source.
Early consultations between Iran, China, and major potential investor groups, over the past few months, have resulted in their being a very high degree of confidence that the appetite for such debt is enormous, especially in the Far East, and also in Russia.
“We would buy everything Iran offered in conjunction with China on own, given the multiple benefits for us,” a senior figure close to the Russian administration, told NewsBase. “For a start, we’re heavily involved in Iran’s oil and gas fields anyway so we know the underlying assets are great, second we have massive renminbi-based receipts and obligations that relate to our ongoing gas supply deal to Beijing [Russia is paid for supplied gas in renminbi, which Russia could then use to buy renminbi-denominated bonds to secure stakes in its key target of Iran’s oil and gas assets], and finally it would remove more of our balance sheet away from US dollars and Euros, which are subject to sanctions,” he said.
Similar considerations weigh on Iran as well. “Iran has seen its economy severely damaged by the West during sanctions, so it is a case going forward of being more than happy to do business with the West, but not totally on the West’s terms, and the best way of doing business with the West independently is to do it [in] a non-Western currency where possible,” said the Middle Eastern source.
“That said, Iran does not want to be dependent on the Chinese either – hence the simultaneous issuing of renminbi-denominated bonds through three administrative centres,” he added. “In essence, sanctions have taught Iran not to become too dependent on anyone else, and to balance one power base against another, which is what it will do going forward,” he concluded.
http://ift.tt/1VmpmBX
As Iran seeks to finance the development of its oil and gas sector, Tehran plans to issue attractive local bonds while eyeing a return to the global sovereign bond markets
As we approach the widely-anticipated removal of United Nations sanctions on Iran on or around June 30, the final part of Tehran’s post-sanctions strategy was flagged last week with the low-key, and largely overlooked, announcement that it is to issue 50 trillion rials (US$1.7 billion) in local currency-denominated bonds this Iranian calendar year (ending in March 2016).
It is not that the proceeds of the issue are to be primarily used to help fund enhanced recovery and preservation projects with focus on the giant South Pars gas field, though, that is of interest to global financial market players. Rather, it is what the issue itself signals about Iran’s plans on how to finance its overall development once sanctions have been removed that many in the markets regard as momentous.
“This type of good-sized local currency issuance is precisely what countries do when they are looking to re-enter the global sovereign bond market after a notable absence,” Jeremy Stretch, head of markets strategy for CIBC, told NewsBase. “It allows them to gauge the buzz that is generated once the news is fully absorbed by potential global investors, and also to get the engine of its capital markets infrastructure back into gear,” he added.
In fact, ever since the realisation grew in Tehran’s corridors of power that, with the Western-friendly President Hassan Rouhani in place, the West’s longstanding sanctions against Iran over its nuclear programme may soon be removed, plans to resuscitate Iran’s capital markets have moved quickly and are now at a remarkably developed stage, according to NewsBase sources.
“The key catalyst for Iran was when Rouhani received that first phone call from [US President] Barack Obama [on 27 September 2013], the first time that a US leader had spoken with an Iranian president since the [Islamic] Revolution threw out the [US-backed] Shah in 1979,” Mahmood Khaghani, former director general of the National Iranian Oil Co. (NIOC) and director for Caspian Sea Oil and Gas Affairs in the Ministry of Petroleum, told NewsBase.
“From that point onwards, we have been gearing up to ensure that we can get back into the global oil and gas markets at good capacity, generating working cashflow from boosting our petrochemicals output, and working out how to broaden and deepen our capital markets in order to ensure that there is a big pool of private finance available to realise all of our plans over time,” he added.
Going local
With targets of increasing crude oil production to at least 3 million barrels per day by the end of this Iranian calendar year (and then to 5.7 million bpd by 2018), natural gas production up to 1 billion cubic metres per day by 2018, and petrochemical production to 180 million tonnes per year (tpy) by the end of 2022, it is estimated that Iran will require US$150-550 billion in new capital to achieve these levels (the amount varying according to timeframes for completing key projects).
The problem in raising this capital as it currently stands is that opportunities in the domestic stock market remain, and are likely to remain, extremely limited, given the structure of many of the major weighted institutions listed.
“Many of the most heavily weighted companies are quasi-government institutions that came into existence to serve a specific government purpose, were heavily financed by the state, and now have large debt burdens with the banks,” Mehrdad Emadi, senior economist for risk analysis and energy derivatives markets consultancy, Betamatrix, told NewsBase.
“In turn, the banks and other financial institutions had been directed by the government to make these loans to the quasi-state vehicles at extremely preferential rates so they as well have heavy debt burdens, and the upshot is that the stock market cannot fund the type of money needed for Iran’s plans, and a fresh new pool of capital is required,” he added.
Investing in local currency bonds issued by either of the big state hydrocarbons firms – the National Iranian Oil Co. (NIOC) or the National Iranian Gas Co. (NIGC), with the implicit government guarantee that the paper would carry – is likely to appeal both to those international oil companies (IOCs) who are eyeing bigger, direct investment into Iran’s oil and gas fields, and to those who want to take a more limited risk exposure to Iran in the early days of its post-sanctions recovery.
“The big bold firms that are ready now to put their money into a particular field would regard this type of bond issue as a good way of hedging risk exposure to the downside of any one direct investment by effectively spreading capital risk over Iran’s hydrocarbons sector in general,” Sam Barden, CEO of Middle Eastern fund manager, SBI Markets, told NewsBase. “Smaller firms or the less bold majors may like the idea of getting involved in any nascent Iranian boom at the early stages but want to limit overall risk,” he added.
Meanwhile, Ildar Davletshin, head of oil and gas research for the Moscow-based investment bank, Renaissance Capital, told NewsBase that getting involved early on, as well, in whatever size, would also allow firms to judge how efficiently the resultant bond funds were utilised by the government towards their original intended purpose – “or whether they would wind up being frittered away on a range of non-oil and gas projects, like happened with [Venezuela’s] PDVSA” – and, at least as important, would afford participating firms preferred bidding status for future offers, be they in local currency- or foreign currency-denominated.
A wealth of options
Given Iran’s lack of a sovereign debt credit rating over the past few years, it might seem that the chances of it launching any successful bond issues would be slim at best, but the Iranians have been working on three strategies to ensure that any such landmark issues would meet with extraordinary investor demand, initially from the Far East and then from the major EU countries.
The first of these is to ensure that for issues denominated in rials the return is guaranteed at suitably high coupon rate, over and above that which might be expected to be offered from a B/B+ rated sovereign (which Iran was just prior to its ratings being removed owing to sanctions), according to Emadi.
“There is a lot of investable money both in Iran and with Iranians abroad [Dubai alone is home to around 500,000 Iranians who saw their bank accounts shut down under the sanctions regime] that for reasons mentioned earlier will not go into the stock market but is looking for better than deposit rate bank account returns,” he said.
“It may be that these domestic currency bonds are issued by the NIOC or the NIGC but in effect they will be sovereign bonds but at a higher corporate bond rate yield level, and this would allow Iran’s firms and banks to repair their balance sheets ahead of a growth push,” he added.
Strategy two – at the very advanced stage of completion – NewsBase understands from a number of sources close to the Iranian administration – the issuing of bonds, also in rials, but – crucially for potential foreign buyers – carrying with them the option not only to be redeemed in rials but in any major currency (US dollars, Euros, Japanese yen, British Sterling, and Swiss francs) that a buyer prefers at the prevailing spot rate of the day the buyer decides to redeem the paper.
“This is really a cutting edge idea for bond issuance, but Iran is pressing ahead with this strategy as we speak, and it will offer huge assurance to potential buyers that not only are the bonds liquid but also that any adverse currency risks [from effectively holding rials] does not arise,” said a Middle Eastern legal source.
Finally, and perhaps even more astonishing than multiple currency option idea is not only that one of the currencies on offer for redemption will be the Chinese renminbi, but also that several major international bond issues are planned by Iran, with the Peoples Bank of China (PBOC) in Beijing acting as sole lead underwriter and principal distributor of the bonds.
“The structure will be that the Iranian government, or state vehicle, will issue a bond through the PBOC, which will be backed by the Chinese central bank, either in renminbi or another currency pegged at a specific rate to the renminbi, and the PBOC will then distribute them simultaneously to the Central Bank of the Republic of China (Taiwan) in Taipei, and the Monetary Authority of Macao,” said the Middle Eastern source.
Riding the currency
On the one hand, he added, the risk for the Chinese in this structure will be minimal, as all of the international sovereign issues will be backed fundamentally by some of the world’s largest hydrocarbons reserves, while, on the other hand, the upside is huge, as it will promote the use of the renminbi as one of the world’s truly international currencies, which China regards as befitting its standing on the world stage.
“China has recently been pressing the IMF again on the renminbi being included as one of the currencies used in its Special Drawing Rights [SDRs, the world’s supplementary foreign exchange reserves, their value based on a basket of key international currencies reviewed by IMF every five years, and currently comprised of US dollars, Euros, Yen, and Sterling], so having a vast amount of bonds coming from one of the world’s top energy sources being denominated and traded in renminbi would be a big step for the Chinese in realising this ambition,” said the source.
Early consultations between Iran, China, and major potential investor groups, over the past few months, have resulted in their being a very high degree of confidence that the appetite for such debt is enormous, especially in the Far East, and also in Russia.
“We would buy everything Iran offered in conjunction with China on own, given the multiple benefits for us,” a senior figure close to the Russian administration, told NewsBase. “For a start, we’re heavily involved in Iran’s oil and gas fields anyway so we know the underlying assets are great, second we have massive renminbi-based receipts and obligations that relate to our ongoing gas supply deal to Beijing [Russia is paid for supplied gas in renminbi, which Russia could then use to buy renminbi-denominated bonds to secure stakes in its key target of Iran’s oil and gas assets], and finally it would remove more of our balance sheet away from US dollars and Euros, which are subject to sanctions,” he said.
Similar considerations weigh on Iran as well. “Iran has seen its economy severely damaged by the West during sanctions, so it is a case going forward of being more than happy to do business with the West, but not totally on the West’s terms, and the best way of doing business with the West independently is to do it [in] a non-Western currency where possible,” said the Middle Eastern source.
“That said, Iran does not want to be dependent on the Chinese either – hence the simultaneous issuing of renminbi-denominated bonds through three administrative centres,” he added. “In essence, sanctions have taught Iran not to become too dependent on anyone else, and to balance one power base against another, which is what it will do going forward,” he concluded.
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