Oman government expected to offer $2bn sukuk this week

 22 May 2017 - 0:33


Dubai:  Oman, which saw its debt rating cut to junk this month, appears to be borrowing money it needs far in advance of spending it in order to take advantage of market conditions and prevent investors worrying about its ability to fund itself.
The Omani government is expected to offer this week as much as $2bn of Islamic bonds, its first public offer of sukuk in the international market. It would be Oman’s second international bond issue this year, after a $5bn conventional bond sale in March that was split into tranches of five, 10 and 30 years. Oman is also in the process of syndicating a $3.6bn loan in the Asian bank market.
Should Oman raise the full amount of the syndicated loan plus $2bn with the sukuk, it would secure in the first half of 2017 almost twice the amount it initially planned to raise via international borrowing for the whole year.
Oman is to hold a global call with fixed income investors on Monday; a seven-year sukuk issue is expected and a 12-year tranche might also be considered, a document issued by one of the banks leading the deal showed.
Oman’s $1bn five-year conventional notes issued in March yield around 3.75 percent while its $2bn of 10-year conventional paper yield 5 percent.
These figures suggest a new conventional seven-year deal would be priced at 4.7-4.75 percent.