The debut Eurobond will have a minimum size of Eur 300 million ($279 million) with maturity of at least three years, but possibly up to seven years. The issue will be open to international subscribers outside the US. Bankers say the bulk of the investment is likely to come from Europe, with Asian and Middle Eastern investors picking up the remainder.

Bankers close to the deal say that no timeframe for the launch has been set by the central bank.

‘The bond will set a benchmark for Iran and allow the country to raise finance on international capital markets,’ says a Tehran-based banker. ‘In addition, it will pave the way for local companies to issue corporate bonds in the future.’

The central bank’s decision to go ahead with the bond issue came only two weeks after London-based FitchRatingsassigned its first long-term foreign currency rating to Iran. Fitch on 10 May issued a B+ sub-investment-grade rating to the Islamic republic. US-based Moody’s Investors Servicealso places Iran below investment grade at B2 (MEED 17:5:02).