“LONDON (Reuters) – Bombings and strife apart, Iraq is proving an oasis for investors battered by global financial turmoil, Citi argued in a research note on Thursday.
The cost of insuring Iraq’s bonds against default has fallen so sharply that they now costs less to insure than Venezuelan debt, said Citi economist David Lubin.
Oil-exporter Iraq has benefited from an improvement in its foreign-exchange reserves. Iraqi five-year credit default swaps — instruments which protect against debt default — tightened to 520 basis points from around 635 bps at the start of the year. Similar instruments for Venezuela, whose President Hugo Chavez is leading a wave of takeovers to wrest companies from private and foreign ownership, are currently trading at 611 bps.”