Published: October 6, 2015
The Kurdish Autonomous Region has held meetings with fixed income investors as economic and political divides with Baghdad widen.
Since being granted semi autonomy from the rest of Iraq through a new constitution in 2005, the government of Iraqi Kurdistan has made occasional, bold efforts to further its independence, much to the chagrin of the Baghdad government.
In November 2013 the Kurdish Regional Government (KRG) independently agreed to export some of its considerable oil reserves to Turkey, a move it claimed was within its constitutional rights. The Baghdad government disagreed, arguing that all oil should be sold through the central State Oil Marketing Organisation (SOMO). It threatened to sue any company that bought the oil, a warning shot to anyone that might have considered dealing directly with the KRG.
In late June, the KRG made another bold move. It asked bankers at Goldman Sachs and Deutsche Bank to “organize [sic] a series of meetings with international fixed-income investors in London, with a view to a potential transaction in the near future”, according to an announcement on the government’s website, in a move that many are seeing as a bid to wrest greater economic independence from Baghdad. The proposed timing of the deal has not been disclosed, but the fact that the meetings are being held comes as little surprise.