First Oman sovereign sukuk on Oct 8

Date

10/5/2015 11:33:39 PM

(MENAFN- Khaleej Times)

Oman's first sovereign sukuk will open for subscription on October 8and will close onOctober 22 the sultanate's Ministry of Finance saidon Sunday.

"The debut sovereign sukuk will have a tenor of five years and mature in 2020" the ministry said in a statement.

The rial-denominated issue will have a tenor of five years with its profit rate set through a uniform price auction the ministry said in an emailed statement.

The issue will be open to sophisticated investors - usually taken to mean fund managers banks and other institutions as well as wealthy individuals - with a minimum subscription of OR500000 ($1.3 million) the ministry added.

The size of issue will be decided on completion of a book-building exercise. Previously Omani officials had said they expected the issue to be between OR200 million and OR300 million. The ministry said theprofit rate on the sukuk will be set through a uniform price auction with the issuance size to be finalised upon completion of the book-building exercise.

Moody's Investors Service is expected to assign a provisional rating of A1 to the issuance which is in line with the sultanate's rating and represents the government's full backing and support to the issuance.Bank Muscat is the sole issue manager. The joint lead managers are Bank Muscat together with its Islamic window Meethaq and Standard Chartered Bank.

Mohammed Jawad bin Hassan advisor to the Ministry of Finance and chairman of the Sukuk Committee said the government has studied the Islamic finance industry in the country and identified a need for investment avenues for Islamic financial institutions Islamic funds and takaful operators in Oman to deploy their excess funds in a Shariah-compliant manner in the country.

"The debut sovereign sukuk is an important step in achieving this objective and also supports the Government's objective of developing the capital market in Oman."

Abdullah Al Salmi executive president of Oman's Capital Market Authority said the development of the bond and sukuk market in Oman is a key development target for the CMA.

"We are pleased to work together with the government on this important initiative to bring the first sovereign sukuk to the market. We are confident that this issuance will be well received by investors and will have a positive impact on Oman's capital market particularly the fixed-income market. This sukuk issuance will serve as a benchmark for future issuances spurring further development of the Islamic financial market in Oman and providing an efficient channeling of capital from a wider range of investors for economic development" said Al Salmi.

The sovereign sukuk will be structured as a Sukuk Al Ijara or a lease-based structure that is widely known and recognised in the global Islamic finance industry and investor community the statementsaid. The sukuk will be listed on the Muscat Securities Market after its issuance and can be traded by investors on the secondary market. The Muscat Clearing and Depository Company will act as the certificate holders' agent paying agent and registrar for the sukuk.-

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