Iran starts €1bn bond sale today

Iran will launch today the first installment of a €1 billion (Dh4.98bn) bond offering to help fund development of its South Pars gas field, an official of lead manager Bank Mellat was quoted as saying yesterday.

Saeed Ghafari, Head of Bank Mellat's international department, said the bonds would be released in four phases over a 120-day period, the Oil Ministry's website Shana reported.

"These bonds will be distributed at Iranian banks abroad in four phases, €250 million each," he said.

On Sunday, Shana said Iran would start offering the bonds on March 9, without giving details on four different phases.

It would represent a rare bid by the Islamic Republic, which is under UN and US sanctions over its disputed nuclear work, to raise capital in this way.

Analysts say Iran needs funds to help modernise and expand its oil and gas sector, but particularly Western companies are increasingly wary of investing in the major oil producer due to the nuclear dispute.

The bonds, designed to help finance development of phases 15-18 of Iran's South Pars natural gas field, will have a maturity of three years and an interest rate of eight percent, Shana said on Sunday.

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