MUSCAT: Omantel, the leading telecommunications provider in the Sultanate of Oman, is planning to issue a US dollar denominated sukuk with a 7-year maturity, the proceeds from which will be used to refinance $457 million outstanding notes maturing on October 24, 2023.
The sukuk will be offered to qualified investors under Rule 144A and Regulation S.
Omantel will be holding a series of fixed income calls with qualified investors starting on Monday, October 2, 2023 to provide more information about the sukuk issuance and to give investors an opportunity to ask questions, the publicly listed telecom operator said in a filing to the Muscat Stock Exchange on Wednesday.
The sukuk issuance is expected to have a positive impact on Omantel's financial position and credit rating.
Recently Fitch Ratings has assigned Omantel’s upcoming US dollar benchmark senior unsecured trust certificate offering an expected rating of 'BB+(EXP)' with a Recovery Rating of 'RR4'.
The sukuk will be issued through the trustee, Otel Sukuk Limited (OSL). Oztel Holdings SPC Limited (Oztel) will act as the guarantor to all of Omantel's obligations under the transaction documents.
The expected rating is in line with Omantel's Long-Term Issuer Default Rating (IDR) and senior unsecured rating of 'BB+', Fitch Ratings said on Monday.
OSL is an exempted company with limited liability incorporated in the Cayman Islands. It has been incorporated solely for the purpose of participating in the transactions contemplated by the transaction documents to which it is a party,with shares held by Walkers Fiduciary Limited as share trustee. Omantel is the obligor, seller, buyer and service agent. Fitch understands from management that Omantel will use the proceeds for general corporate purposes, including the redemption of the USD600 million secured notes due 2023 issued by Oztel Holdings SPC Limited, said Fitch.
Also on Monday, Fitch Ratings upgraded Omantel’s Long-Term Issuer Default Rating (IDR) to 'BB+' from 'BB'. The Outlook on the IDR is Stable, it said.
“We have also affirmed the 'BB+' senior unsecured ratings on its USD600 million and USD900 million notes maturing in 2023 and 2028 respectively. The Recovery Rating is 'RR4',” the ratings agency further stated.
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