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Money News

Iran offers to repay government sukuk with oil, Press TV reports

DUBAI (Reuters) - Iran will allow holders of government sukuk, or Islamic bonds, to be repaid in crude oil exports, state-run Press TV reported, citing a finance ministry announcement.

Holders of sukuk due before May 2021 can apply to receive the equivalent of their bonds and their interest in crude cargoes, it said.

It’s unclear how the transactions would work -- presumably, the bondholders could be given options on futures contracts, but the mechanics are not spelled out in the report.

Iran has considered a number of options to boost state revenue battered by the coronavirus crisis and U.S. sanctions. Earlier this year, it was planning to offer oil-backed securities to its citizens and to sell stakes in state companies on the local stock market.

Iran’s economy has been suffering since 2018, when the United States exited Tehran’s nuclear deal with six world powers and re-imposed sanctions, strangling Iran’s oil trade.

This would be the first time Iran has used oil to repay bonds issued in the local market, said Press TV.

Reporting by Davide Barbuscia and Parisa Hafezi, editing by Larry King

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