Iraq's Odious Debts

First phase of Iraqi commercial debt restructuring complete

Republic of Iraq Ministry of Finance Press Release

September 16, 2005

The first phase of Iraq’s commercial debt restructuring to repurchase and cancel, at a discount, claims accumulated during the era of Saddam Hussein is complete. Coordinated by U.S. banks JP Morgan and Citigroup Global Markets and the Ernst & Young Iraq Debt Reconciliation Office, the offer involving $750 million of an estimated $20 billion in outstanding debt owed to the private sector, was accepted by 78% of claimants who agreed to a payment of 10.25% of the principle and past due interest. Only 2% rejected or failed to respond to the terms outright. Describing the response to the first round of the restructuring process as very encouraging, Iraq’s Minister of Finance, Ali A. Allawi, said “all remaining commercial claimants should receive their invitations in the coming few months as their claims are reconciled.” Iraq estimates it has inherited more than $125 billion in commercial and bilateral debt from the ousted regime of Saddam Hussei.

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