Sultanate signs $3.55 bn 5-year loan

MUSCAT: The Government of the Sultanate of Oman signed a $3.55 billion 5-year senior unsecured term loan with a group of Chinese financial institutions.
A statement issued by the Ministry of Finance said that the term loan follows the Sultanate’s $5.0 billion multi-tranche bond and $2.0 billion sukuk priced earlier this year. The transaction witnessed strong interest from a group of leading Chinese banks with the transaction upsized from the initial target of $2.0 billion to accommodate the interest from the lenders.
The transaction was noteworthy in number of ways and was able to fulfill Sultanate’s key objectives such including complete government’s external funding requirement for 2017, diversification of funding sources from the debt capital markets and the traditional source of western/regional banks funding, a milestone transaction and a first for the region, where only Chinese financial institutions were invited to participate in a loan that introduced new pool of investors to the Sultanate of Oman.
“The transaction saw significant demand from the Chinese lending base, reaffirming lenders’ continued belief in the Sultanate’s long-term credit fundamentals. The $3.55 billion transaction size also represents the largest-ever deal achieved for a regional borrower exclusively in the Chinese market.
“The strong demand supported the competitive pricing and enabled Oman to upsize the facility. The transaction was self-arranged by the newly established Debt Management Office in the Ministry of Finance.
“We are delighted to see the strong interest and support from the Chinese financial institutions and companies to increase their investments in Oman. The transaction demonstrates the continued confidence of international investors in Oman.
“With this loan we have successfully completed the financing requirements for the expected 2017 fiscal deficit, and also been able to meet the refinancing needs in relation to some of the loan instalments that fell due during the year,” said Nasser bin Khamis al Jashmi, Under-Secretary of the Ministry of Finance. — ONA