Oman signs $3.55bn loan deal with Chi­nese in­sti­tu­tions

Muscat Daily - - BUSINESS -

Mus­cat – The sul­tanate’s gov­ern­ment signed a US$3.55bn five 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 Oman’s US$5bn multi-tranche bond and US$2bn sukuk priced ear­lier this year. The trans­ac­tion wit­nessed strong in­ter­est from the group of lead­ing Chi­nese banks with the trans­ac­tion up­sized from the ini­tial tar­get of US$2bn to ac­com­mo­date the in­ter­est from the lenders.

The trans­ac­tion was note­wor­thy in a num­ber of ways and was able to ful­fill sul­tanate’s key ob­jec­tives such as com­plet­ing gov­ern­ment’s ex­ter­nal fund­ing re­quire­ment for 2017, and di­ver­si­fy­ing fund­ing sources from the debt cap­i­tal mar­kets and the tra­di­tional source of west­ern/re­gional banks fund­ing.

It is a mile­stone trans­ac­tion and a first for the re­gion where only Chi­nese fi­nan­cial in­stitu- tions were in­vited to par­tic­i­pate in a loan that in­tro­duced new pool of in­vestors to Oman.

‘The trans­ac­tion saw sig­nif­i­cant de­mand from the Chi­nese lend­ing base, reaf­firm­ing lenders’ con­tin­ued be­lief in Oman’s longterm credit fun­da­men­tals’, the Min­istry of Fi­nance said in its state­ment.

The US$3.55bn trans­ac­tion size also rep­re­sents the largest ever deal size 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,” H E Nasser bin Khamis al Jashmi, Un­der­sec­re­tary of the Min­istry of Fi­nance said.

H E Nasser bin Khamis al Jashmi

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