Oman signs $3.55bn loan deal with Chinese institutions
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