Alizz Islamic selected to act as joint lead manager for Oman Sukuk issue

Alizz Islamic Bank was selected to act as Joint Lead Manager for the recently issued Government of Oman 7-year USD Sukuk along with a syndicate of global banks which included Dubai Islamic Bank, HSBC, Standard Chartered, JP Morgan, GIB and Citibank.
Ghalib al Busaidi (pictured), DGM & Head of Wholesale Banking commented, “Our selection as Joint Lead Manager for the inaugural issue of 7-year USD Sukuk is hugely significant and prestigious for Alizz Islamic Bank.
The trust that has been placed in us by the Government of Oman to deliver on a global stage is truly appreciated and the issue itself was a huge success despite the challenges associated with the recent credit downgrade by S&P which appears to have been brushed aside by the global investor community.
It is clear that global investor confidence in the prospects for the Oman economy is high and this is evident in the significant oversubscription which resulted in a sizeable tightening in the spread against swaps (as a benchmark) from initial pricing thoughts (IPT).”
Alizz Islamic Bank was the only Omani bank to have been selected to lead the issue as part of the syndicate.
The Sukuk structured based on Ijarah (lease) which carries a rental rate of 4.397 per cent and maturing May 2024 was eventually oversubscribed over three times with institutional investors from Asia, Middle East, Europe and US taking up the offer. The eventual size of the issue was $2 billion as planned at the outset which resulted in investors receiving a lower allocation than they required.
Ghalib al Busaidi further elaborated, “Having seen the huge success of the conventional bond issue earlier in the year where the Government of Oman issued the 5 year, 10 year and 30 year maturities which was four times oversubscribed, we were hopeful that the 7 year Sukuk would be well received globally, and it certainly was. Unsurprisingly, the MENA region was the dominant category of investors with European investors also showing very healthy demand.
The Sukuk was not only confined to Islamic investors with conventional accounts also constituting significant demand for the issue.”
Al Busaidi further explained,“Most importantly however was the eventual pricing which was the biggest success at 235 bps over swaps(as a benchmark) resulting in a rental rate of 4.397 per cent. I think this should give confidence to other GRE’s and corporates considering their USD funding options as Sukuks are a viable tool to raise funding. We at Alizz Islamic Bank have a strong and capable investment banking team able to provide support to state entities and corporates wanting to tap the capital markets both locally in Omani Rials as well as globally in USD through various innovative Shariah compliant structures including sukuks and funds. Structured and Project financing is another specialized area where our team identifies and arranges necessary funding solutions for various projects. The team has successfully executed transactions in various sectors including hospitality, health care, higher education and oil and gas.”