Oman plans to sell its first sovereign sukuk of OMR200 million (US$520 million) through a private placement and will launch subscriptions soon, said Times of Oman quoting a local official.
“The sovereign sukuk issue will be through a private placement process and marketed primarily to Islamic financial institutions, and sophisticated investors with a minimum subscription amount of OMR500,000,” said Mr Tahir Salim Al Amry, who heads the sukuk committee.
The Director-General of Treasury and Accounts at the Ministry of Finance also said that in-principle approval has been secured from the Capital Market Authority (CMA) and the committee is now in the advanced stages of the transaction’s structuring and documentation.
Mr Al Amry said: “The sovereign sukuk is primarily aimed at addressing the need of the nascent but fast-growing Islamic financial sector in Oman. The sukuk will serve as a domestic investment and liquidity management instrument to Islamic financial institutions in the country.
“In addition, the issuance of the debut sovereign sukuk will support the government in fulfilling its development targets and creating a benchmark for capital market transactions in Oman in general and sukuk in particular.”
Mr Abdullah Al Salmi, Executive President of the CMA, told Times of Oman: “We are confident that this will have a positive impact on Oman’s capital market by serving as a benchmark for future sukuk issuances.”
The face value of the sukuk issue will be OMR1 and the investor community can buy the Islamic bond once it is listed on the Muscat Securities Market, he added.
The officials did not give other details of the sukuk issue, such as its tenor and structure.
Bank Muscat Investment Banking and its Shariah-compliant window Meethaq, together with Standard Chartered Bank, have been appointed to advise the government on the transaction.
OMR1 = US$2.60