Oman's debut sovereign sukuk opens on Oct 8

Oman’s Ministry of Finance today announced that the Sultanate's debut sovereign sukuk will open for subscription on October 8, 2015 and close on October 22, 2015.

The debut sovereign sukuk will have a tenor of 5 years and mature in 2020.

The profit 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.

The issuance is open to subscription by sophisticated investors with a minimum investment of OMR 500,000 (Dh4.77 million).

Moody's Investors Service is expected to assign a provisional rating of (P) 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 & 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."

The debut sovereign sukuk will be structured as a sukuk-al-Ijara or a lease based structure which is widely known and recognized in the global Islamic finance industry and investor community.

For the purpose of this debut sovereign sukuk, an issuer Special Purpose Vehicle, or SPV company, has been created and registered with the Ministry of Commerce and Industry named Oman Sovereign sukuk S.A.O.C., which is wholly-owned by the Ministry of Finance. Its board members are comprised of representatives of the Ministry of Finance and the CMA who are also members of the sukuk Committee and Coordination Team formed by the Ministry of Finance for this issuance.

The certificates of the debut sovereign sukuk will be listed on the Muscat Securities Market and can be traded by investors on the secondary market.

The Muscat Clearing and Depository Company S.A.O.C. will act as the certificate holders' agent, paying agent and registrar for the sukuk.

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