Thursday, 28 October 2021 02:20 GMT

Oman tightens price on $2bn sukuk amid rush of orders


(MENAFN- Muscat Daily) Brussels- Oman's US$2bn Islamic bond sale on Tuesday lured orders for more than three times the issue size, allowing it to cut the price offered to investors as it seeks funds to help trim a budget deficit.

The sultanate set final terms on its seven year sukuk at 235 basis points over the mid-swap rate, from initial guidance of about 270 basis points, according to a person familiar with the deal. Money managers bid over US$6.9bn for the new issue at the final spread, the person said, asking not to be identified.

Oman is the largest Arab oil producer outside OPEC and a halving of crude prices since 2014 left it with a budget gap of almost 22 per cent of economic output in 2016, according to the International Monetary Fund (IMF).

'There was a good demand and now a rush to get an allocation with accepting even less yield,' said Lutz Roehmeyer, who manages about US$2.5bn at Landesbank Berlin Investment and bid to buy the new issue even after the country tightened pricing.

Alizz islamic bank, Citigroup Inc, Dubai Islamic Bank, Gulf International Bank, HSBC Holdings Plc, JPMorgan Chase & Co and Standard Chartered Plc are managing the deal.

The country's last foray into international debt markets was a US$5bn three part offering of dollar bonds in March.

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