Tuesday, Jan 28, 2020
International Finance

Oman raises $3 billion through international bonds

Oman bonds
The 5 year bonds and 10 year bonds received orders worth $14 billion from the investors

Oman raised $3 billion through bonds, as part of its first foray into international debt markets, in 2019. The low yield combined with high returns environment of the country attracted global investors which prompted Oman to foray into the international market.

The money received is expected to aid Oman’s economy.

The funding was coordinated by Citigroup Global Markets and First Abu Dhabi Bank along with JP Morgan securities, MUFG securities EMEA as well as Natixis, Societe Generale, and Standard Chartered Bank.

Oman offered five-year bonds that are due in February 2025, at a final yield of 4.95 percent. The 10-year bonds, on the other hand, were priced at a yield of 6 percent. Both five year and 10-year Oman bonds received orders worth $14 billion from the investors.

The yield was below the initial price guidance of 5.375 percent and 6.375 percent for the five-year bonds and ten-year bonds respectively.

According to data from various sources, Oman issued $750 million in five and half year bonds and $2.25 billion in ten-year bonds.

The reports vary slightly from the previous estimations. The earlier estimated size of the bond was $2 billion, which was supposed to cover up Oman’s budget deficit that was expected to be $7.3 billion in 2019.

The fall in oil prices had hit Oman like most other countries whose main source of income was oil production. The decreased revenue led to a widening of the nation’s fiscal deficit.

In early 2019, the three major rating agencies S&P Global, March Moody and Fitch Ratings downgraded Oman’s economic capacity and potential. The bond was an experiment to see if Oman could tap any foreign debt markets.


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