A year after a historic nuclear deal that offered it a route out of isolation Iran is seeking to finance an economic recovery by exploring a return to international debt markets for the first time since 2002.

In a step that could attract bond investors a credit rating in the “near future” ois hoped to be secured by Iran, said the Islamic country’s Economy Minister Ali Tayebnia, whose ministry is at the forefront of securing Iran’s access to the global financial system, in an interview in Tehran. He said that Iranian officials are “negotiating with all the rating agencies”.

The lifting of sanctions from Iran has been a landmark diplomatic success for Iranian President Hassan Rouhani who is now trying to translate that success into tangible economic benefits for Iran’s 80 million people. However the concern of global banks they might fall foul of U.S. Treasury sanctions not lifted under the July 2015 accord has hindered by his bid to lure billions of dollars in foreign investment needed to rebuild infrastructure. Moves by Republican lawmakers in Washington to roll back the deal have also been heavily criticized by Tehran.

“In the area of banking relations, especially big banks, we are still faced with some problems. However some of these problems, gradually and over time, will be resolved,” Tayebnia said.

In return for the removal of most sanctions, Iran agreed to dismantle key parts of its atomic program under the July 2015 deal. By eliminating Iran’s capacity to develop nuclear warheads, the agreement averted a possible military confrontation.

The possibility of opening up one of the world’s last major untapped frontier markets had also been presented to many investors.

According to the International Monetary Fund, Iran last issued international debt in July 2002. Akbar Komijani, a deputy central bank governor, said in an interview on June 30 that officials from Fitch Ratings visited the country in June to make an initial assessment of the economy. While not elaborating on discussions, the company confirmed about the deliberations in March.

Following the maturity and full repayment of its last sovereign Eurobond in 2008, Fitch withdrew its B+ sovereign rating, the fourth-highest junk grade, for Iran. According to data compiled by Bloomberg, Moody’s withdrew its B2 rating on Iran in 2002.

“Right now, the groundwork for issuing bonds and various Iranian debt securities in international markets exists,” Tayebnia said. However the potential timing and size of the sale was not elaborated by him.

In an effort to repair public finances battered by the plunge in crude prices, this OPEC member would join other major oil producers that have rushed to the bond market.

Shortly before Qatar tapped investors for almost double that amount, Abu Dhabi, the capital of the United Arab Emirates, raised $5 billion in April. Recently sources have also been quoted in the media saying that banks have been hired to help arrange for its first international bond sale by Saudi Arabia, Iran’s main political rival in the region.

However to finance multiple projects crucial to create jobs and fuel economic growth authorities in Iran are already pursuing other avenues.

Since the nuclear deal was implemented in January, about $45 billion worth of financing agreements “with various countries” have been reached, said the economy minister. However “get to the implementation stage”, it could take several months, he said.

“It’s natural that when a car that has stalled and wants to start moving, at first it will come under more strain and will need a higher driving force, after that it will move with more ease,” he said.

(Adapted from Bloomberg)

Categories: Economy & Finance, Uncategorized