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MEC issues landmark debut Sukuk certificates

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FINANCING MILESTONE: Landmark transaction marks the first international corporate Sukuk issue out of Oman, and the first RegS/144A corporate Sukuk out of the MENA region since May 2016.


Business Reporter -


MUSCAT, NOV 13 -


Mazoon Electricity Company SAOC, a subsidiary of the Electricity Holding Company (Nama Group), has announced the successful pricing of its debut Reg S/144A $500 million 10-year Sukuk offering. The Sharia compliant Ijara Structure was adopted for issue of the Sukuk Certificates and the profit rate was set 5.20 per cent. The issuance is rated Baa2 (Negative) by Moody’s and BBB (Negative) by Fitch.


The Certificates are listed on the Irish Stock Exchange and the issuance was managed by Mazoon and Nama Holding along with JP Morgan Securities plc, Bank Muscat SAOG, KFH Capital Investment Company KSCC and First Abu Dhabi Bank PJSC acting as Joint Lead Managers and Noor Bank PJSC and Warba Bank (KSC) acting as co- managers.


Commenting on this milestone, Hassan bin Mohammed al Lawati, Chairman of Nama Group, said: “Since 2014, the Group’s financing programme — Lamar project has so far achieved financing RO 1.407 billion up to date. The fundraising programme will support the Group’s electricity transmission and distribution networks investments.”


This landmark transaction marks the first international corporate Sukuk issue out of the Sultanate of Oman, and the first RegS/144A corporate Sukuk out of the MENA region since May 2016. Robust investor demand translated into a final orderbook of c.US$5bn from 300 orders, representing more than 10 times oversubscription. The final orderbook distribution by geography comprised 47 per cent from the MENA region, 17 per cent from Asian investors, 23 per cent from European investors and 13 per cent from US investors. The composition of the investors by investor type was Banks and Private Banks (52 per cent), Asset Managers (46 per cent) and Sovereigns, Supranationals and Agencies (SSA) / Pension and insurance 2 per cent.


A comprehensive global roadshow was conducted in Asia, UAE, London, Boston and New York. With this marketing effort, Mazoon was able to build strong momentum and price the 10-year Sukuk offering via an intra-day execution process. “We attribute the success of the Sukuk certificate issue primarily to the prevailing transparent, robust and successful regulatory mechanism, support of the Government and consistent growth of the company,” said the Chief Executive Officer Zahir Abdulla al Abri.


The Group Chief Financial Officer of the Nama Group Hussain Abdullatif al Balushi said, “It was a remarkable success of Mazoon Electricity Company’s debut Sukuk issuance. Robust demand from international and Islamic investors prompted Mazoon to tighten pricing from price guidance to reach the profit rate of 5.20 per cent.”


Mazoon Electricity is primarily undertaking regulated distribution and supply of electricity in Al Dakhiliyah, Al Sharqiyah South, Al Sharqiyah North and South Al Batinah governorates, under a licence issued by the AER, Oman.


Nama Group consists of ten joint stock companies registered in the Sultanate of Oman. These companies were created as a result of restructuring of the Electricity sector and its related water services in 2004 and commenced commercial operations on May 1, 2005. The Group of companies include Nama Holding, Mazoon Electricity Company, Muscat Electricity Distribution Company, Majan Electricity Company, Dhofar Power Company, Rural Areas Electricity Company), Oman Electricity Transmission Company, Gubrah Power and Desalination Company, Wadi Jizzi Power Company, and Oman Power and Water Procurement Company.


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