Iraq announces successful conclusion of commercial debt restructuring (19/09/05)

The Republic of Iraq today announced the successful conclusion of the first phase of its offer to repurchase and cancel, at a discount, claims held by commercial creditors.

Phase one of the commercial debt restructuring was deemed a success

On 8 August 2005, the first batch of invitations to settle (at a discount) commercial claims were sent to creditors whose claims had been substantially reconciled.

The offer period for the Invitation expired on Friday 9 September 2005.

Of $750 million in commercial claims eligible for settlement pursuant to this first round of offers, preliminary results are that holders of approximately 78 per cent of claims accepted outright.

Only a very small number of holders, approximately two per cent of claims, rejected or failed to respond.

Holders representing approximately 20 per cent of claims elected to defer making a decision until work on their remaining unreconciled claims could progress further, an option that was expressly permitted by the terms of the offer.

"We are very encouraged by the results of this first round of offers", said Ali A. Allawi, Iraq's Minister of Finance. "Iraq's debt restructuring program is on track and on schedule. All remaining commercial claimants should receive their invitations in the coming few months as their claims are reconciled."

On 26 July 2005, Iraq announced its intention to offer to settle all outstanding commercial claims against Iraq and Iraqi public sector obligors through a discounted cash purchase or a debt-for-debt exchange offer, depending upon the aggregate size of a holder's claims.

A second offer period to settle claims for cash will begin shortly as the next batch of claimants eligible to receive the cash purchase offer become substantially reconciled. A debt-for-debt exchange targeted to holders of larger aggregate claims is planned for the fourth quarter of 2005.

Source: Business Wire