UK investors expected to show strong support for first ever Kurdistan bond

The first ever Kurdistan bond is expected to this week gain support from UK investors, although it will leave the region paying a hefty borrowing rate.

The bond issue, which will be priced with an interest rate of between 11% and 12%, comes just a fortnight after a change in the law enabled the oil-rich region to raise money - up to $5bn - on the international market. The deal is expected to raise between $500m and $1bn.

Last week, the Financial Times reported that the region's plans for greater financial autonomy had been hampered by opposition to the bond sale leading to the quasi-sovereign debt paying one of the highest borrowing rates in sovereign markets.

But the Sunday Times said it understood that more than 80 investors had attended a meeting with Kurdish officials and that interest was strong.

Goldman Sachs and Deutsche Bank are handling the bond issue, the proceeds of which will be used to fund infrastructure projects in the region.

The pricing of the bond is expected on Monday or Tuesday, although it may be delayed by the Greek referendum, should the country reject the terms of the IMF's bailout offer.