Glencore Plc has restructured a $500 million oil-for-cash loan to Kurdistan in northern Iraq, reducing payments for 2020 as the semi-autonomous region struggles due to low petroleum prices, Bloomberg News reported. The pre-payment deals have been popular among some African and Middle Eastern producers with few others ways of raising funds. But they have also proved controversial, in some cases creating an opaque form of debt that puts governments’ finances under strain when oil prices drop. The restructuring was announced via a regulatory filing on the Cayman Islands Stock Exchange, where debt notes linked to the Kurdish loan are listed. After oil plunged earlier this year, Kurdistan struggled to repay its oil-for-cash debt, as did the likes of Chad and the Republic of Congo. The loans are paid back with oil cargoes. If crude prices fall, countries need to divert more barrels to keep up with the payments. Glencore, the world’s largest commodity trader, lent the money to the Kurdistan Regional Government in January 2017, with repayments starting three years later. Under the new terms, the KRG will repay the loan at a rate of $3 million per month between June and November, compared with an original repayment schedule of $20.8 million per month, according to the July 8 regulatory notice. From December 2020 until December next year, the KRG agreed to increase its monthly repayments to about $29.9 million. Read more.